The amount that the shareholders paid the corporation in exchange for their stock is paid-in capital . The difference between par value and the total paid-in capital is called additional paid-in capital .

Florent paid $10,000 cash to Pinnacle Company and received 1,000 shares of its $1 par-value common stock. Complete the journal entry that Pinnacle Company would make for this transaction.

Dr. Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cr. Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cr. Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . .