Questions: Niren, Inc.'s charter authorizes 1,000,000 shares of stock at a par value of 1 per share. Niren sells 100 shares of stock at its initial offering for 1 per share. The journal entry to record this transaction will include a (debit/credit) to Common Stock, 1 par for

Solution Steps

To solve this problem, we need to understand the accounting entry for issuing stock. When a company issues stock, it receives cash and increases its equity. The common stock account is credited with the par value of the shares issued, and the cash account is debited with the total amount received. In this case, Niren, Inc. sells 100 shares at $1 per share, so the common stock account will be credited with the par value of the shares issued.

Niren, Inc. sells \(100\) shares of stock.

The par value per share is \(\$1\).

The total credit to the Common Stock account is calculated by multiplying the number of shares sold by the par value per share: \[ \text{Total Credit to Common Stock} = \text{shares sold} \times \text{par value per share} = 100 \times 1 = 100 \]

Final Answer