Explain the differences in recording the initial issue of stock for (a) par-value, (b) stated- value, and (c) no-par stock in terms of the effect of each on the Common Stock account.
What will be an ideal response?
a. When par value common stock is issued, the Common Stock account is increased by the product of the number of shares issued times the par value per share.
b. When stated value common stock is issued, the Common Stock account is increased by the product of the number of shares issued times the stated value per share
c. When no-par stock is issued, the entire amount of the proceeds from the stock issue is recorded in the Common Stock account with no Paid-in Excess account required.
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