When Bunyan Corporation was formed on January 1, 20xx, the corporate charter pro

Question

When Bunyan Corporation was formed on January 1, 20xx, the corporate charter provided for 97,200 shares of $9 par value common stock. The following transaction was among those engaged in by the corporation during its first month of operation: The corporation issued 6,560 shares of stock at a price of $24 per share. Which of the following would be included when recording the transaction?

debit to Common Stock for $97,200 credit to Paid in Capital in Excess of Par for $98,400 credit to Common Stock for $157,440 debit to Cash for $59,040

Explanation / Answer

Answer: credit to Paid in Capital in Excess of Par for $98,400

Debit Cash $157440 (6560 shares x $24)
Credit Common Stock                          $59040 (6560 shares x $9 par)
Credit Paid in Capital in Excess of par   $98400 ( 6560shares * $15)

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