A corporation was organized in January year 1 with authorized capital of $10 par value common stock. On February 1, year 1, shares were issued at par for cash. On March 1, year 1, the corporation's attorney accepted 5,000 shares of the common stock in settlement for legal services with a fair value of $60,000. Additional paid‐in capital would increase on .

Additional paid‐in capital would increase by $10,000.

Explanation:

A corporation was organized in January year 1 with authorized capital of $10 par value common stock.

On February 1, year 1, shares were issued at par for cash.

On March 1, year 1, the corporation's attorney accepted 5,000 shares of the common stock in settlement for legal services with a fair value of $60,000.

Additional paid‐in capital would increase by $10,000.

Normally 5000 shares issued at par would cost (5,000 x $10) = $50,000

The difference between Par value of shares issued and the sum paid for the shares  = Additional Paid in capital which is $60,000 - $50,000 = $10,000

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