Golden Eagle Corporation issues 100 shares of $10 par value common stock for $50 per share. This transaction will include a credit to Common Stock for:

Question

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The par value of the 100 shares of common stock is $10 per share, which means that the total common stock credit will be equal to the number of shares issued multiplied by the par value per share, or $10 x 100 = $1,000. Since the stock was issued for $50 per share, there is an excess over par value of $40 per share ($50 - $10). To record this excess, a credit is made to Paid-in Capital in Excess of Par, which will amount to $4,000 ($40 x 100). Therefore, the correct credit to Common Stock is $1,000 and to Paid-in Capital in Excess of Par is $4,000.

Golden Eagle Corporation Issues 100 Shares of $10 Par Value