Question

Gibson Corporation issued 5,000 shares of stated value common lock for $15 per share on Record the stock wance Record debts to the credits Select the explanation on the last line of the many Date Accounts and Explanation Credit

Answer 1

Here, instead of par value, the stated value per share is $ 5 and each share is sold for $ 15. So excess amount is transferred to paid in capital in excess of stated value. The journal entry will be,

Date	Accounts	Debit	Credit
July 7	Cash	$ 75,000
	To Common stock		$ 25,000
	To Paid in capital in excess of stated value		$ 50,000

SUMMARY:

The share price above the stated value is credited to paid in capital in excess of stated value.