Question

When collectability is reasonably assured, the excess of the subscription price over the stated value of the no par common stock subscribed should be recorded as:

Answer 1

The correct answer is "Additional paid-in capital when the subscription is recorded"

Step-by-step explanation

When the common stock subscribed is called "owner equity account", immediately it changes into common stock upon issuance. Additionally keep in mind that any "paid-in capital" we need to record it when the contract is signed, like as the cash was received at this moment.