A corporation issued 5,000 shares of its no par common stock that was assigned a $1 stated value per share. The issue price was $10 per share. The entry to record this transaction would be:

Question

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The entry to record the issuance of no par common stock with a stated value includes debiting the cash received, crediting the common stock at the stated value per share (in this case, $1 per share), and crediting the excess of the issuance price over the stated value to a separate account called "Paid-in Capital in Excess of Stated Value, Common Stock." Therefore, the correct entry to record the issuance of 5,000 shares at $10 per share would be: Debit Cash $50,000; credit Paid-in Capital in Excess of Stated Value, Common Stock $45,000; credit Common Stock $5,000.

A Corporation Issued 5,000 Shares of Its No Par Common