When shares are issued like All City Realty Inc did, the journal entry to record it will include a credit to Paid-In Capital in Excess of Stated-Common for $49,000.
How will All City Realty record the transaction?
The entire amount that was earned from the share issuance is:
= 7,000 x 11
= $77,000
This entire amount will go to the cash account as a debit to show that the cash account is increasing in value.
The amount to the common stock is:
= Stated value x number of shares
= 4 x 7,000
= $28,000
This amount will be credited to the Common Stock account to show that it is increasing.
The difference is:
= 77,000 - 28,000
= $49,000
This amount will be credited to the Paid-In Capital in Excess of Stated-Common.
In conclusion, option A Paid-In Capital in Excess of Stated-Common for $49,000 is correct.
Find out more on Paid-In capital at https://brainly.com/question/13372465
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