A company received $5,000 cash when it issued stock certificates to shareholders. the increase in cash would be recorded with a debit to the cash account.
What is the  appropriate entries for stock issuance
Issuing stock for cash means that the company is selling its stocks to investors or existing shareholders which necessitates issuing stocks to them to show that are now part owners of the company such that the investors pay cash to the company for the stocks received.
The impact of this transaction on the balance sheet is that cash received from investors would increase the cash balance under the current asset heading of the balance sheet and the common stock account would also rise by the amount of new common stocks issued, in other words, the increase in asset is the same as the increase in stockholder's equity.
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