The entry to record S&C, Inc. selling 1,500 shares of $9 par common stock for $22 per share would be to:

Question

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When a company issues common stock, the amount of money it receives is recorded as a credit to the Common Stock account. However, in this case, the company is selling common stock for more than its par value. Therefore, the excess amount received over the par value needs to be recorded separately as a credit to "Paid-In Capital in Excess of Par-Common Stock."

So, the journal entry to record the sale of 1,500 shares of $9 par common stock for $22 per share would be:

Debit Cash: $33,000 (1,500 shares x $22 per share)
Credit Common Stock: $13,500 (1,500 shares x $9 par value)
Credit Paid-In Capital in Excess of Par-Common Stock: $19,500 (($22 selling price - $9 par value) x 1,500 shares)

The Entry to Record S&C, Inc