How much will be recorded as a firm's additional paid-in capital if it issues 1 million shares that have a $5 par value for $15 per share?
A) $0
B) $5,000,000
C) $10,000,000
D) $15,000,000

Question

Quizplus · Accepted Answer

The additional paid-in capital is equal to the difference between the issue price per share and the par value per share. In this case, the issue price per share is $15 and the par value per share is $5, so the additional paid-in capital per share is $10. Multiplied by the 1 million shares issued, the total additional paid-in capital is $10,000,000.

How Much Will Be Recorded as a Firm's Additional Paid-In