Common and Preferred Stock Fielder Company has the following accounts in the Stockholders’ Equity category of the balance sheet: Common Stock, $10 no par, 10,000 shares authorized, 9,000 issued, 8,000...

Solution of question id PPSub040815_304886_3
Q 1. Explain how the issuance of stock affects the financial statements when the stock
has no par value?
A 1. No par value stock is shares that have been issued without a par value listed on the face
of the stock certificate. When a company sells no par value stock to investors, it debits cash
received, and credits the common stock account. If a company had instead sold common stock
to investors that had a par value, then it would credit the common stock account up to the
amount of the par value of the shares sold, and it would credit the additional paid-in
capital account in the amount of any additional price paid by investors in excess of the par value
of the stock. Most shares issued today are classified as no-par or low-par value stock. No-par
value stock prices are determined by what investors are willing to pay for them in the market. ...