What is the journal entry to record additional paid-in capital (APIC)?
APIC is the difference between the issued price (i.e. market price) and the par value assigned to the stock. If the issued price is higher than the par value, then the difference is plugged to APIC. The journal entry below illustrates the journal entry the company would record when stock is issued. As you can see, the $15 excess issue price is tagged to APIC, which would be a credit to APIC. APIC is an equity account, and a credit to an equity account increases the balance.
Common stock will always be credited for the par value, while cash would be debited. Cash is received by the company when they issue common stock, and the transaction would be categorized as a cash inflow in the financing section of the cash flow statement.
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