Questions: Example Journal Entry for Par Value stock issued at Par: Example Journal Entry for Par Value stock issued above Par:

To address the question regarding journal entries for par value stock issued at par and above par, let's break down each scenario:

1. Par Value Stock Issued at Par:

   When a company issues stock at its par value, the journal entry reflects the receipt of cash and the issuance of stock at its nominal value. Here's how the entry would look:

   • Debit: Cash (for the total amount received)
   • Credit: Common Stock (for the par value of the shares issued)

   Example: Suppose a company issues 1,000 shares of common stock with a par value of $10 per share at par. The journal entry would be:

   • Debit: Cash $10,000 (1,000 shares x $10)
   • Credit: Common Stock $10,000

2. Par Value Stock Issued Above Par:

   When stock is issued above its par value, the company receives more cash than the nominal value of the stock. The excess amount is recorded in an additional paid-in capital account, often called "Paid-in Capital in Excess of Par."

   • Debit: Cash (for the total amount received)
   • Credit: Common Stock (for the par value of the shares issued)
   • Credit: Paid-in Capital in Excess of Par (for the amount received above par value)

   Example: Suppose a company issues 1,000 shares of common stock with a par value of $10 per share at $15 per share. The journal entry would be:

   • Debit: Cash $15,000 (1,000 shares x $15)
   • Credit: Common Stock $10,000 (1,000 shares x $10)
   • Credit: Paid-in Capital in Excess of Par $5,000 (1,000 shares x $5)

In summary, the key difference between issuing stock at par and above par is the additional paid-in capital entry, which accounts for the excess amount received over the par value.