Question

A firm issued 10,000 shares of $2 par-value common stock, receiving proceeds of $40 per share. The amount recorded for the paid-in capital in excess of par account is ________.A) $0 in the Common Stock account.
B) $0 in the Paid-in Capital in Excess of Par account.
C) $400,000 in the Common Stock account.
D) $400,000 in the Paid-in Capital in Excess of Par account.

Answer 1

Answer:

the amount recorded for the paid-in capital in excess of par account is $380,000

Explanation:

The computation of the amount of paid in capital in excess of par account is shown below:

= Number of shares issued × (per share value - par value of the common stock)

= 10,000 shares × ($40 - $2)

= 10,000 shares × $38

= $380,000

Hence, the amount recorded for the paid-in capital in excess of par account is $380,000

The options that are given are wrong