When 100 shares of $1 par value Common Stock are issued at $25 per share, Paid-in Capital in Excess of Par value-Common Stock will:
A) increase $100.
B) increase $2,500.
C) increase $2,400.
D) stay the same.

Question

Quizplus · Accepted Answer

The Paid-in Capital in Excess of Par value-Common Stock increases by the amount received over the par value. Here, the shares are issued at $25 each, which is $24 above the $1 par value. For 100 shares, this excess is $24 x 100 = $2,400.

When 100 Shares of $1 Par Value Common Stock Are