Asked by Dorthie Brown on Jun 08, 2024
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Delta Corp. issues 4000 shares of $10 par value common stock at $14 per share. When the transaction is recorded credits are made to
A) Common Stock $40000 and Paid-in Capital in Excess of Stated Value $16000.
B) Common Stock $56000.
C) Common Stock $40000 and Paid-in Capital in Excess of Par $16000.
D) Common Stock $40000 and Retained Earnings $16000.
Paid-In Capital
The total amount of money or other value that shareholders have contributed to a company in exchange for shares of stock, indicating the funds raised from equity rather than from ongoing operations.
Par Value
The face value of a bond or the nominal value of a stock, as stated by the issuing company in its charter.
Common Stock
Represents equity ownership in a corporation, giving shareholders voting rights and a claim on a portion of the company's profits through dividends.
- Learn the core principles that dictate the registration of equity transactions and their subsequent impact on a company's financial statements.
- Ascertain and evaluate the process involved in the issuance of common and preferred equity, enfolding those with par value, lacking par value, and a designated value.
- Perceive the importance and implications of paid-in capital surpassing par or stated value in transactions related to equity.
Verified Answer
Learning Objectives
- Learn the core principles that dictate the registration of equity transactions and their subsequent impact on a company's financial statements.
- Ascertain and evaluate the process involved in the issuance of common and preferred equity, enfolding those with par value, lacking par value, and a designated value.
- Perceive the importance and implications of paid-in capital surpassing par or stated value in transactions related to equity.
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