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How would the company accountant record the transaction

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Reference no: EM132964368

Problem 1: Union Bay Transit sells 1 million shares of stock with no par value for $15 a share. How would the company's accountant record this transaction?

Option 1: debit Cash for $20,000, debit Capital Receivable for $14,980,000, credit Common Shares for $20,000 and credit Contributed surplus for $14,980,000.

Option 2: debit Cash for $20,000 and credit Common Shares for $20,000.

Option 3: debit Cash for $15 million and credit Common Shares for $15 million.

Option 4: debit Cash for $15 million, credit Common Shares for $20,000 and credit Contributed surplus for $14,980,000.

Reference no: EM132964368

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