The entry to record selling 700 shares of stated value $50 common stock for $74 per share would be:

Question

Quizplus · Accepted Answer

The stated value of each share of common stock is $50, therefore 700 shares would have a stated value of $35,000 (700 x $50). However, the shares were sold for $74 per share, resulting in a total of $51,800 ($74 x 700). The entry to record this transaction would be a debit to Cash for the total amount received, $51,800, and a credit to Common Stock for the stated value of the shares, $35,000. The remaining amount, $16,800 ($51,800 - $35,000), is the excess over the stated value, which would be credited to Paid-in Capital in Excess of Stated Value. Therefore, the correct entry is to debit Cash $51,800; credit Common Stock $35,000; credit Paid-in Capital in Excess of Stated Value $16,800.

The Entry to Record Selling 700 Shares of Stated Value