If common stock is issued for an amount greater than par value the excess would increase

Question

Quizplus · Accepted Answer

When common stock is issued for an amount greater than par value, the excess amount is added to the Paid-in Capital in Excess of Par Value account. This account represents the amount received by the company in excess of the par or stated value of the stock. This amount is not considered as part of the legal capital, which is the minimum amount a company must maintain in order to protect its creditors.

If Common Stock Is Issued for an Amount Greater Than