10.2 Learning Objective 10-2
1) Corporations may sell stock directly to the stockholders.
2) A company can sell common stock in exchange for assets other than cash.
3) When common stock is issued for services provided to the corporation, the corporation usually recognizes an expense for the fair market value of the services provided.
4) Another name for Paid-in Capital in Excess of Par is Additional Paid-in Capital.
5) Convertible preferred stock is usually convertible into the issuer's common stock at the discretion of the preferred stockholder.
6) When a company issues common stock at a price per share greater than its par value per share, the excess should be credited to:
A) Retained Earnings.
B) Common Stock.
C) Paid-in Capital in Excess of Par—Common.
D) Excess Capital.
7) The difference between the issue price per share of the stock and the par value per share of the stock is credited to:
A) Retained Earnings.
B) Common Stock.
C) Paid-in Capital in Excess of Par.
D) Income Summary.
8) If a corporation issues 4,000 shares of $1 par value common stock for $8,000, the journal entry would include a credit to:
A) Common Stock for $8,000.
B) Paid-in Capital in Excess of Par—Common for $8,000.
C) Common Stock for $4,000.
D) Retained Earnings for $4,000.
9) If a corporation issues 5,000 shares of $5 par value common stock for $95,000, the journal entry would include a credit to:
A) Common Stock for $95,000.
B) Paid-in Capital in Excess of Par—Common for $95,000.
C) Common Stock for $70,000.
D) Paid-in Capital in Excess of Par—Common for $70,000.
10) The journal entry to record common stock issued at its par value includes a:
A) debit to Retained Earnings.
B) debit to Common Stock.
C) credit to Retained Earnings.
D) credit to Common Stock.