a) After completing all of the entries in Exercise 1, what is the correct credit balance recorded to Paid-In Capital in Excess of Par- Preferred Stock account? See circle on the printed exercise.

Exercise 1: Issuing Stock A 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 dollar value that is often assigned to each share. The Common Stock account can only reflect the shares issued multiplied by the par value. The remainder is recorded in the Paid- In Capital account. Common Stock Belson Corporation issued (sold) 1,000 shares of $10 par value common stock for $17 per share Paid-in Capital in Excess of Par- Common Stock Cash Common Stock 17,000 10,000 7,000 The entry to record the issuance of Preferred stock is similar. Complete the following entry: Preferred Stock: Belson Corporation issued (sold) 1,000 shares of $25 par value preferred stock for $30 per sharee Paid-in Capital in Excess of Par Preferred Stock Cash Preferred Stoc In some instances, a stock can be issued with no par value. Review the completed example below No-Par Stock Belson Corporation issued (sold) 100 shares of no-par value common stock for $50 per share Cash Common Stock 5,000 5,000