Premium
Premium is a term that records the sale of stock at more than par value. In this book we use the account Paid-In Capital in Excess of Par Value to record the premium received.
Definitions
According to College Accounting: A Practical Approach by Slater (13th edition),
- Premium. A term that records the sale of stock at more than par value. In this book we use the account Paid-In Capital in Excess of Par Value to record the premium received.
According to the Strategic Management by David and David (15th edition),
- Premium. If an acquiring firm pays more for another firm than that firm's stock price times its # of shares of stock outstanding (book value or market value), then the overage is called a premium.
Related concepts
- Accounting (alternatively known as accountancy) is management of financial data, information, and knowledge about financial transactions of legal entities. Accountancy tends to include bookkeeping and, depending on a particilar enterprise, may also include quatitative analysis of financial data in the bookkeeping system and/or business intelligence.
