Question

When collectibility is reasonably assured, the excess of the subscription price over the stated value of the no par common stock subscribed should be recorded as:a. No par common stock.b. Additional paid-in capital when the subscription is recorded.c. Additional paid-in capital when the subscription is collected.d. Additional paid-in capital when the common stock is issued.

Answer 1

Answer: (b.) Additional paid-in capital when the subscription is recorded.

The common stocks that are signed are an individual's equity account that are changed by common stock at provision.

Also if there's any extra paid-in working capital is transcribed when agreement is subscribed, just when cash were accepted at that point.

Therefore, the correct option is (b).