The entry to record the issuance of common stock at a price above its par value includes:

Question

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When common stock is issued above its par value, the amount received in excess of par value is recorded as Additional Paid-in Capital: Common Stock. Therefore, the entry to record the issuance of common stock at a price above its par value would include a credit to Cash, a debit to Common Stock and a credit to Additional Paid-in Capital: Common Stock. Option A would be true, but incomplete. Option B is incorrect as there would be no liability account for the difference between the price paid by the stockholders and the par value of the stock.

The Entry to Record the Issuance of Common Stock at a Price