Alpha Company issued 1,000 shares of $10 par value common stock to stockholders,in exchange for $15,000 cash.Which of the following correctly describes the impact of this transaction on Alpha's financial statements?

Question

Quizplus · Accepted Answer

The transaction involves issuing 1,000 shares at $10 par value for $15,000 cash. This means the common stock (par value) is credited for $10,000 (1,000 shares * $10 par value), and the excess amount received over par value, $5,000 ($15,000 - $10,000), is credited to additional paid-in capital. Thus, D is correct.

Alpha Company Issued 1,000 Shares of $10 Par Value Common