Common Stock Issuance by Concord Corp.
What are the credits made when Concord Corp. issues 1300 shares of $10 par value common stock at $17 per share?
a. Common Stock $13000 and Retained Earnings $9100
b. Common Stock $13000 and Paid-in Capital in Excess of Stated Value $9100
c. Common Stock $22100
d. Common Stock $13000 and Paid-in Capital in Excess of Par $9100
Answer:
d. Common Stock $13000 and Paid-in Capital in Excess of Par $9100
When Concord Corp. issues 1,300 shares of $10 par value common stock at $17 per share, the transaction is recorded by crediting Common Stock for $13,000 and Paid-in Capital in Excess of Par for $9,100.
To explain this further, the par value of the common stock is $10, and 1,300 shares are issued. The Common Stock account is credited for the total par value (1,300 shares x $10 par value = $13,000). The shares are issued at $17 per share, which is $7 above the par value. This results in a total of 1,300 shares x $7 excess = $9,100, credited to the Paid-in Capital in Excess of Par account.
In summary, the correct credits are Common Stock $13,000 and Paid-in Capital in Excess of Par $9,100. This accurately reflects the issuance of the shares and their value, while also accounting for the additional amount received above the par value.