When no-par common stock with a stated value is issued for cash the Common Stock account is increased for an amount equal to the cash proceeds.

Name: When no-par common stock with a stated value is issued for cash the Common Stock account is increased for an amount equal to the cash proceeds.
Brand: Quizplus
Rating: 4.8 (50 reviews)

Question

Quizplus · Accepted Answer

The Common Stock account is increased by the stated value of the shares issued, not the cash proceeds. Any excess over the stated value is credited to Additional Paid-In Capital.

When No-Par Common Stock with a Stated Value Is Issued