Final answer:
The transaction of Alma Corp. issuing stock is recorded by crediting the Common Stock account for the par value amount ($10,000) and crediting the Paid-in Capital in Excess of Par Value account for the amount that exceeds the par value ($6,000), making the correct answer option b.
Step-by-step explanation:
When Alma Corp. issues 1,000 shares of $10 par value common stock at $16 per share, the transaction is recorded by crediting the Common Stock account and the Paid-in Capital in Excess of Par Value account. The Common Stock account is credited for the par value of the shares, which is the nominal or face value set for the stock ($10 x 1,000 shares = $10,000). The remainder of the proceeds from the stock sale that exceeds the par value is credited to the Paid-in Capital in Excess of Par Value account (or sometimes called Additional Paid-In Capital), which in this case is $6,000 ($16 sale price - $10 par value x 1,000 shares).
The correct journal entry for the transaction would be:
- Debit Cash $16,000 (1,000 shares x $16 sale price)
- Credit Common Stock $10,000 (1,000 shares x $10 par value)
- Credit Paid-in Capital in Excess of Par Value $6,000 (1,000 shares x $6 excess amount)
Therefore, the correct answer to the student's question is option b: Common Stock $10,000 and Paid-in Capital in Excess of Par Value $6,000.