Common Stock, Preferred Stock, and Paid-in Capital
Types of Share Capital
Companies may issue common stock, preferred stock, or both. Common shareholders usually have voting rights and participate in the company's future growth. Preferred shareholders generally receive dividend and liquidation preferences but often have limited voting rights.
When shares are issued above par value, the excess is recorded as Additional Paid-in Capital (APIC). The par value itself is credited to the stock account.
Note
Par value is often very small and generally has little economic significance today.
Summary
Issued stock is recorded between stock accounts and APIC based on par value and issue price.