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What is the journal entry for a stock issue?
Issuing Par Value Common Stock for Cash (assume par value is $1) dr. Cash $1.00 cr. Common Stock $1.00 to record issuance of 1 share of $1 par common stock if sold for more than par value (Assuming $5) dr. Cash $5 cr. Common Stock $1 Paid-in Capital in excess of par $4 to record issuance of 1 share of common stock in excess of par.
What is the definition of par stock?
The basic meaning of par stock is the amount of stock a business or individual should keep on hand at all times. If your stock amount falls below this par, you should purchase more to keep it at that number.
Capital paid in excess of par common stock?
Capital amount paid for excess of par value of common stock is called "Share premium amount" which is also part of capital of business.
What type of account is common stock?
Equity Account When shares have no par value, the entire amount of the sale price is recorded in the common stock account. This account is classified as an equity account, and so appears near the bottom of a reporting entity's balance sheet
Common stockholders do not have the right to?
Common stock holders do not have the right to choose a stock's par value. That accounting decision lies with the company itself.
The excess of issue price over par of common stock is termed what?
premium
What is the par value of each share if the hamiliton brush company issued 2500 shares of common stock worth 100000.00?
Par value has no real connection to the worth of common stock. For example, when Starbucks went public, its shares of stock was $0.001 par, but opened at $17 and closed in the same day at $21.50; so if there were 2,500 shares sold at opening, it worth 2,500 x $17 = $42,500, but this has no connection to par value. Assuming the 2,500 shares of common stock sold at par value and the earnings was $100,000.00; the par value would be $100,000 / 2,500 = $40.00
The par value of common stock must always be equal to its market value on the date the stock is issued?
False
What does paid in capital account represent?
par value of common and preferred stock+additional paid in capital(amount in excess of par)
When is the sale of common stock sold on a subscription basis at a price in excess of par recorded?
When there is reserves as well as retained earnings are also presentaed in balance sheet then price of share is more than its face value and then at that time shares are issed at excess of par value.
What is the journal entry for selling 3000 shares of 1 par common stock at 49 per share?
Cash Common Stock Paid in Capital
The par value per share of common stock represents?
the minimum selling price of the stock established by the articles of incorporation
