Question

Irish Corporation issued (sold) 10,000 shares of common stock for $70 per share. The bylaws established a stated value of $10 per share. What is the amount of increase in the common stock account as a result of this transaction?

Answer 1

Answer:

$100,000

Explanation:

The common stock account would increase by the total value of the stated value of the shares issued and the difference between the issue price and stated value would increase the capital in excess of the par account

Increase in common stock account=10,000*$10

Increase in common stock account=$100,000

increase in paid-in capital in excess of par=($70-$10)*10,000

increase in paid-in capital in excess of par=$60*10,000

increase in paid-in capital in excess of par=$600,000