If the corporation when formed sets a par value for its shares low and issue common stock for a price above par, what is this amount above par called? Can this amount be treated as a gain, income, or profit for the corporation? Please give the reason for your answer. Can I have this explained because I am thinking this will be classed as capital to the business and if so which one would this be treated as above Gain, Income, or Profit?
If the corporation when formed sets a par value for its shares low and issue common stock for a price above par, what is this amount above par called? Can this amount be treated as a gain, income, or profit for the corporation? Please give the reason for your answer. Can I have this explained because I am thinking this will be classed as capital to the business and if so which one would this be treated as above Gain, Income, or Profit?
Chapter14: Corporation Accounting
Section: Chapter Questions
Problem 21MC: Which of the following measures the portion of a corporations profit allocated to each outstanding...
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If the corporation when formed sets a par value for its shares low and issue common stock for a price above par, what is this amount above par called? Can this amount be treated as a gain, income, or profit for the corporation? Please give the reason for your answer.
Can I have this explained because I am thinking this will be classed as capital to the business and if so which one would this be treated as above Gain, Income, or Profit?
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