If common stock is issued for an amount greater than par value, the excess should be credited to
A) Retained Earnings.
B) Cash.
C) Legal Capital.
D) Paid-in Capital in Excess of Par Value.

Question

Quizplus · Accepted Answer

If common stock is issued for an amount greater than par value, then the excess amount above par value is credited to "Paid-in Capital in Excess of Par Value" account. This represents the amount of capital raised by the company from investors in addition to the stated par value of the shares. Retained earnings, cash, and legal capital are not affected by the issuance of stock at a premium.

If Common Stock Is Issued for an Amount Greater Than