If Norben Company issues 6,000 shares of $5 par value common stock for $210,000, the account
A)Common Stock will be credited for $210,000.
B)Paid-in Capital in Excess of Par Value will be credited for $30,000.
C)Paid-in Capital in Excess of Par Value will be credited for $180,000.
D)Cash will be debited for $180,000.

Question

Quizplus · Accepted Answer

The common stock is issued at $210,000, which is $35 per share ($210,000/6,000 shares). The par value is $5 per share, so the excess over par value is $30 per share ($35 - $5). For 6,000 shares, this excess amounts to $180,000, which is credited to Paid-in Capital in Excess of Par Value.

If Norben Company Issues 6,000 Shares of $5 Par Value