When a company issues common stock greater than its par value, the excess should be credited to:
A) retained earnings.
B) common stock.
C) paid-in capital in excess of par.
D) capital.

Question

Quizplus · Accepted Answer

When a company issues common stock greater than its par value, the excess should be credited to paid-in capital in excess of par. This account records the amount of equity capital that investors have paid above the par value of the shares. Retained earnings are profits earned by the company that have not been distributed to shareholders as dividends. Common stock is the basic unit of ownership in a corporation, and capital is a general term for the financial resources of a company, including both debt and equity.

When a Company Issues Common Stock Greater Than Its Par