When a company issues common stock at a price per share greater than its par value per share,the excess should be credited to:
A)Retained Earnings.
B)Common Stock.
C)Paid-in Capital in Excess of Par-Common.
D)Excess Capital.

Question

Quizplus · Accepted Answer

When a company issues common stock at a price per share greater than its par value per share, the excess should be credited to the account Paid-in Capital in Excess of Par-Common. This account reflects the amount of capital raised from the sale of the shares that is in excess of their par value. This excess capital represents a form of equity financing and should be disclosed separately from the common stock account in the equity section of the balance sheet. The Retained Earnings account is used to record profits that are retained in the company for future use, while the Common Stock account is used to record the par value of the stock issued. "Excess Capital" is not a recognized accounting term.

When a Company Issues Common Stock at a Price Per