Alma Corp. issues 1,000 shares of $10 par value common stock at $16 per share. When the transaction is recorded, a credit or credits are made to:

Question

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The par value of the shares is $10, and the company is selling them at a price of $16 per share. This means that the company is receiving $6 per share in excess of the par value. This excess amount is recorded as additional paid-in capital. Therefore, the credit or credits made are to Common Stock $10,000 (1,000 shares x $10 par value) and Additional Paid-in Capital $6,000 (1,000 shares x $6 excess per share).

Alma Corp Issues 1,000 Shares of $10 Par Value Common Stock