When common stock is issued at an amount greater than par value, the difference between the par value and the proceeds from the sale is recorded by
A)crediting the common stock account
B)debiting an additional paid-in capital account
C)crediting the retained earnings account
D)crediting an additional paid-in capital account

Question

Quizplus · Accepted Answer

When common stock is issued at an amount greater than par value, the difference between the par value and the proceeds from the sale is recorded in the additional paid-in capital account. This is because the additional amount represents the excess paid by investors over the par value of the stock. Therefore, the correct answer is to credit an additional paid-in capital account.

When Common Stock Is Issued at an Amount Greater Than