When a company issues no-par stock with no stated value, there is no need for an account titled "paid-in capital in excess of par."

Question

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When a company issues no-par stock without a stated value, it means that the stock certificates issued do not have a par value (the nominal or face value) assigned to them. Par value is a notional value originally assigned to the stock as a minimum price at which the shares can be issued. It is often set at a very low amount, such as $0.01 or $1.00.In the case of no-par stock, since there is no par value, there is no need to differentiate between the par value and the amount received over the par value. Therefore, there is no need for an account titled "paid-in capital in excess of par" (also known as "additional paid-in capital" or "share premium"), which is typically used to record the difference between the amount received from issuing stock and the par value of the stock.
Instead, when no-par stock is issued, the entire amount received from the sale of the stock is recorded directly in the common stock account or in a "stated value" account if a stated value is assigned. The common stock account will reflect the total capital contributed by shareholders for the shares issued, without the need to separate it into par value and additional paid-in capital.
Here's how the journal entry would look when no-par stock is issued:
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Cash (or other consideration received)   XXX
    Common Stock                         XXX
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In this entry, "XXX" represents the total amount of cash or other consideration received for the issuance of the no-par stock. The entire amount is credited to the Common Stock account, reflecting the increase in equity from the issuance of stock. There is no separate line for "Paid-in Capital in Excess of Par" because, without a par value, there is no "excess" to account for.

When a Company Issues No-Par Stock with No Stated Value