Joe’s Fence Company issued 800 shares of no-par common stock for $7,200. Which of the following would occur if the stock has stated value of $2 per share?Select a Choice Belowcurrent question choicesOptionAIncrease Cash and increase Common Stock for $7,200.OptionBIncrease Cash for $7,200 and increase Common Stock $1,600 and Paid-in Capital in Excess of Par $5,600.OptionCIncrease Cash for $7,200 and increase Common Stock for $ 1,600 and Paid-in Capital in Excess of Stated Value for $5,600.OptionDDecrease Common Stock and decrease Cash for $7,200.

Paid-in Capital in Excess of Stated Value = Issue value - Par value of shares = $7,200 - 800 shares x $2 per share = $5,600Date Accounts Debit Credit Cash $7,200 Common Stock $1,500 Paid-in Capital in Excess of Stated Value $5,600 Option C. is correct answer.

Answered: Joe’s Fence Company issued 800 shares…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Select a Choice Below

current question choices

OptionA

Increase Cash and increase Common Stock for $7,200.
OptionB

Increase Cash for $7,200 and increase Common Stock $1,600 and Paid-in Capital in Excess of Par $5,600.
OptionC

Increase Cash for $7,200 and increase Common Stock for $ 1,600 and Paid-in Capital in Excess of Stated Value for $5,600.
OptionD

Decrease Common Stock and decrease Cash for $7,200.

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