Illusions Corp.issues 5,000 shares of $20 par common stock for $28 per share.The amount credited to paid-in capital in excess of par is:

Question

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The par value of the stock is $20 per share, so the total par value of 5,000 shares is $100,000 ($20 x 5,000). The company received $28 per share, which means they received total proceeds of $140,000 (5,000 shares x $28 per share).

To determine the amount credited to paid-in capital in excess of par, we need to subtract the total par value from the total proceeds:

$140,000 - $100,000 = $40,000

Therefore, the answer is B, $40,000.