When no-par stock is issued,the entire proceeds are credited to Capital Stock and this amount is viewed as legal capital not subject to withdrawal.

Question

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When no-par stock is issued, the entire proceeds are credited to Capital Stock and this amount is viewed as legal capital not subject to withdrawal. This is because there is no par value per share that can be assigned and therefore the entire amount is considered legal capital.

When No-Par Stock Is Issued,the Entire Proceeds Are Credited to Capital