Reynaldo Inc.issued 1,000 shares of $10 stated value stock for $1 per share.How would the company record this transaction?
A)Debit Cash for $10,000 and credit Paid-In Capital in Excess of Par Value,Common Stock for $10,000.
B)Debit Cash for $10,000 and credit Paid-In Capital for $10,000.
C)Debit Common Stock,$10 Stated Value for $10,000 and credit Cash for $10,000.
D)Debit Cash for $10,000 and credit Common Stock,$10 Stated Value for $10,000.
E)Debit Cash for $10,000 and credit Paid-In Capital,Common Stock for $10,000.

Question

Quizplus · Accepted Answer

When stock is issued for less than its par value, the difference is recorded as a discount on the stock.