When 1000 shares of $3 stated value common stock is issued at $18 per share,________.
A) Common Stock - $3 Stated is credited for $18,000
B) the account titled Paid-In Capital in Excess of Stated-Common is used to record the issue price of the stock
C) the difference between the issue price and the stated value is credited to Paid-In Capital in Excess of Stated-Common
D) the accounting is exactly the same as the accounting for par value stock

Question

Quizplus · Accepted Answer

When common stock with a stated value is issued at a price higher than the stated value, the difference between the issue price and the stated value is recorded as Paid-In Capital in Excess of Stated-Common. In this case, the difference is $15 ($18 issue price - $3 stated value), so Paid-In Capital in Excess of Stated-Common would be credited for $15,000 ($15 x 1000 shares). The Common Stock - $3 Stated account would also be credited for $3,000 ($3 stated value x 1000 shares) to reflect the par value of the stock issued.

When 1000 Shares of $3 Stated Value Common Stock Is