Alma Corp. issues 1,000 shares of $10 par common stock at $14 per share. When the transaction is recorded, credits are made to
A) Common Stock, $14,000
B) Common Stock, $10,000, and Paid-In Capital in Excess of Par-Common Stock, $4,000
C) Common Stock, $4,000, and Paid-In Capital in Excess of Stated Value, $10,000
D) Common Stock, $10,000, and Retained Earnings, $4,000

Question

Quizplus · Accepted Answer

The credit entry for the issuance of common stock is made to the Common Stock account for the par value of the shares issued, in this case, $10,000. The excess of the issue price over the par value is recorded in the Paid-In Capital in Excess of Par-Common Stock account, which is $4,000 ($14 - $10 = $4). Therefore, the correct answer is B.

Alma Corp Issues 1,000 Shares of $10 Par Common Stock at at $14