Question

All City​ Realty, Inc. issued 10 comma 000 shares of $ 3 stated value common stock for $ 16 per share. The journal entry to record this transaction includes a credit to​ ________. A. Common Stock long dash $ 3 Stated Value for $ 130 comma 000 B. PaidminusIn Capital in Excess of Stated long dash Common for $ 130 comma 000 C. PaidminusIn Capital in Excess of Stated long dash Common for $ 30 comma 000 D. Common Stock for $ 160 comma 000

Answer 1

Answer:

B. Paid-In Capital in Excess of Stated long dash Common for $ 130,000

Explanation:

Whenever shares are issued at a price higher than the par value, then the additional value that is higher than par value is is added to paid in capital in excess of stated common capital.

Here, in the given case stated capital = 10,000 $\times$ $3 = $30,000

Paid in capital in excess of stated capital = 10,000 $\times$ ($16 - $3) = $130,000

Thus, correct entry will include credit to both of the above.

Therefore, correct option is

B. Paid-In Capital in Excess of Stated long dash Common for $ 130,000