Asked by Teigan Catlin on Jun 24, 2024
Verified
If Dakota Company issues 1,500 shares of $6 par common stock for $75,000,
A) Common Stock will be credited for $75,000
B) Paid-In Capital in Excess of Par will be credited for $9,000
C) Paid-In Capital in Excess of Par will be credited for $66,000
D) Cash will be debited for $66,000
Paid-In Capital in Excess of Par
The amount of capital received from investors for stock, in excess of the par value of the shares.
Common Stock
A type of equity ownership in a corporation, with voting rights and potential dividends, representing a share in the company's profits and losses.
- Comprehend the fiscal operations and ledger recordings pertinent to the release of common stock, inclusive of dealings exceeding or falling short of par value.
- Assess the valuation and account for transactions involving property and stocks.
Verified Answer
FR
Fisko RenandiJun 28, 2024
Final Answer :
C
Explanation :
The par value of the common stock is $6 per share. The total par value of 1,500 shares is $9,000 (1,500 x $6). Since the total amount received from issuing the stock is $75,000, the Paid-In Capital in Excess of Par account will be credited for the difference between the total amount received and the total par value of the stock, which is $66,000 ($75,000 - $9,000).
Learning Objectives
- Comprehend the fiscal operations and ledger recordings pertinent to the release of common stock, inclusive of dealings exceeding or falling short of par value.
- Assess the valuation and account for transactions involving property and stocks.