Concept Introduction:
Common stock and its issue:
Common stock can be defined as the share of issue to raise funds for the operations of the business. The common shares can be issued at a premium i.e. a price above par value. When the common stocks are issued at a price above par value, the over and above cash received from the par is added to “Additional paid in capital”.
Requirement 1
To record
a. Issue of stock if the stock is true no-par stock
b. Issue of stock if the stock has stated value of $ 2 per share
Requirement 2
Which type of stock results in more total paid-in capital
Want to see the full answer?
Check out a sample textbook solutionChapter 13 Solutions
Horngren's Accounting Plus MyAccountingLab with Pearson eText -- Access Card Package (11th Edition) (Miller-Nobles et al., The Horngren Accounting Series)
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education