A company issues one hundred shares of no-par common stock with a $10 stated value for $17 per share. The entry to record this issuance includes a:

Question

Quizplus · Accepted Answer

As the common stock has a stated value of $10 and is being issued for $17, the amount in excess of the stated value is $7 per share. Therefore, the entry to record the issuance of 100 shares would be a credit to Common Stock for $1,000 (100 shares x $10 stated value), a credit to Paid-in Capital in Excess of Stated Value-Common for $700 (100 shares x $7 excess of stated value), and a debit to Cash for $1,700 (100 shares x $17 issue price). Thus, option B is correct as it states the credit to Paid-in Capital in Excess of Stated Value-Common for $700.

A Company Issues One Hundred Shares of No-Par Common Stock