Question

If two person each purchased 10,000 shares of $1 par value common stocks at $1 per share.

1) Is it only written like this: Cash 10,000

Common Stock 10000

No additional paid-in capital since par value is also $1?  

Thank you.

Answer 1

If two person each purchased 10,000 shares of $1 par value common stocks at $1 per share, the journal

entry in the books of the issuing company will be as under:

Journal

Date	Account title	Debit	Credit
	Cash	20,000
	Common stock		20,000

Each person buys shares of = $10,000

Hence, two person will buy shares of $20,000

No additional paid-in capital will be involved since par value is also $1.

Additional paid in capital is credited when shares are issued at a price more than par value.

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