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The value of common stock issued is reported in the stockholder's equity section of a company's balance sheet.
The common stock balance is calculated as the nominal or par value of the common stock multiplied by the number of common stock shares outstanding. The nominal value of a company's stock is an arbitrary value assigned for balance sheet purposes when the company is issuing shares?and is generally $1 or less.
Common stock is a tradeable asset or security that represents your ownership of a corporation's equity that's normally attained by purchasing the company's shares. You can claim a share in the corporation's profits and dividends as a common stockholder.
The first balance sheet account affected by issuing stock is the cash account. The cash account increases by the amount your company receives for the purchased stock. If you receive capital in excess of par value, create two cash account entries to allocate the money received for each category.
Common stock is an asset for the company that issued it, but it is not a liability. Common stock represents ownership in a company and represents a claim on the company's assets and earnings.