A firm issued 5,000 shares of $1 par-value common stock, receiving proceeds of $20 per share. The amount recorded for the paid-in capital in excess of par account is ________.
A) $5,000
B) $95,000
C) $100,000
D) $0

Question

Quizplus · Accepted Answer

The paid-in capital in excess of par account is calculated by subtracting the par value of the stock from the proceeds received per share and multiplying that by the number of shares sold. Therefore, the calculation would be:

($20 - $1) x 5,000 = $95,000

So, the answer is option B.

A Firm Issued 5,000 Shares of $1 Par-Value Common Stock