The entry to sell 100 shares of $1 par value common stock at $5 per share would include a credit to Paid-in Capital in Excess of Par-Common for $400.

Question

Quizplus · Accepted Answer

The calculation for the entry would be as follows:

Debit Cash: $500 (100 shares x $5 per share)
Credit Common Stock: $100 ($1 par value x 100 shares)
Credit Paid-in Capital in Excess of Par-Common: $400 (($5 per share - $1 par value) x 100 shares))

The Entry to Sell 100 Shares of $1 Par Value