ACG 2021 CHAPTER 11 EXERCISE Exercise 1: Issuing Stock I3. company will often issue (sell) shares of stock to raise capital. The two main classes of stock are Common Stock and Preferred Stock. Review the completed example below for the issuance of Common Stock shares. Notice that the entry includes increases to two equity accounts, Common Stock and Paid-In Capital in Excess of Par. Par (Stated) value is an arbitrary doilar value that is often assigned to each share. The Common Stor account can only reect the shares issued multiplied by the par value. The remainder is recorded in the Paid- ln Capital account. Common Stock: Betson Corporation issued (sold) 1,000 shares of $10 par value common stock for $17 per share. Paid-in Capital in Excess of Par- Cash Common Stock Common Stock 17,000 ll i 10,000 I! 7,000 The entry to record the issuance of Preferred stock is similar. Complete the following entry: Preferred Stock: Beison Corporation issued (sold) 1,000 shares of $25 par value preferred stock for $30 per share. Paid-in Capital in Excess of Par- Preferred Stock Cash Preferred Stock WT In some instances, a stock can be issued with no par value. Review the completed example below: 0 No-Par Stock: Belson Corporation issued (sold) 100 shares of no-par value common stock for $50 per share. Cash Common Stock 5,000 I' I 5,000 7