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    BrittVD's Avatar
    BrittVD Posts: 3, Reputation: 1
    New Member
    		  
    #1

    Mar 25, 2009, 03:48 PM
    Accounts for Par Value of Stock and Accounts for Paid in Capital
    Why do we have one account for the Par Value of Stock that has been issued and another account for Paid in Capital?

    Any help I can get with this question will be greatly appreciated!:)
    hamzashakaa's Avatar
    hamzashakaa Posts: 161, Reputation: 8
    Junior Member
    		  
    #2

    Mar 26, 2009, 01:21 AM

    The par value of the stock represents the legal capital and the maximum liability of the shareholders. Upon issuance of the stocks any amount in excess of the par value will be recorded in a separate account called Paid in capital in excess of par.
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