Which of the following is true for a corporation that issues 1,000 shares of $2 par common stock at $5 per share?

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When a corporation issues 1,000 shares of $2 par common stock at $5 per share, the common stock account will be credited for $2,000 (1,000 shares x $2 par value), and the additional paid-in capital account will be credited for $3,000 (1,000 shares x [$5 selling price - $2 par value]). Therefore, total stockholders' equity will increase by $5,000 ($2,000 par value + $3,000 additional paid-in capital). The per share dividend amount is not provided in this information. The maximum selling price for these shares is not limited to $2 per share since the par value is only $2.

Which of the Following Is True for a Corporation That