Trinity Corp., issued stock above par on July 31. Answer the following questions about Trinity Corp.
1. Trinity Corp., received $5 million for the issuance of its stock. The par value of the Trinity Corp., stock was only $4.5 million. Was the excess amount of $500,000 a profit to Trinity Corp? Did the excess affect net income? If not, what was it?
2. Suppose the par value of the Trinity Corp., stock had been $1 per share, $5 per share, or $10 per share. Would a change in the par value of the company’s stock affect Trinity’s total paid-in capital? When issuing stock, what does affect total paid-in capital?