The entry to record selling 800 shares of stated value $37 common stock for $59 per share would be:

Question

Quizplus · Accepted Answer

The transaction involves selling 800 shares of common stock with a stated value of $37 each for a total of $59 per share, which is $22 above the stated value. The entry should reflect the new amount received for each share in excess of the stated value as "Paid-in Capital in Excess of Stated Value" account.

Debit Cash for the total amount received, which is 800 x $59 = $47,200. Credit Common Stock for the total stated value of the shares sold, which is 800 x $37 = $29,600. Credit the remaining amount, which is the excess of the sales price over the stated value, to "Paid-in Capital in Excess of Stated Value" account, and the amount is 800 x $22 = $17,600. Therefore, the entry should be:

Debit Cash $47,200; credit Common Stock $29,600; credit Paid-in Capital in Excess of Stated Value $17,600.

The Entry to Record Selling 800 Shares of Stated Value