john kim agrees to contribute equipment with a fair market value of $5,000 in exchange for 100 shares of rio inc.'s common stock with a par value of $1 per share. rio will record this transaction as a credit to which of the following accounts? (check all that apply.)

John Kim contributed equipment with a fair market value of $5,000 in exchange for 100 shares of Rio Inc.'s common stock with a par value of $1 per share. Rio Inc should record this transaction as a credit in common stock and paid in capital in excess of Par value.

Paid-in capital in excess of par value is the difference between the stock's fair market value and its par value. It is the premium paid for a stock that has appreciated in value. Paid in capital in excess of par is formed when investors pay more than the par value for their shares of stock.

Hence, the transaction of of $5,000 should be recorded as a credit in paid in capital in excess of par value.

Another transaction is : 100 shares of Rio Inc's worth $1 per share. Hence, transaction of $100 should be recorded as a credit in common stock.

Therefore, the transactions should be recorded as follows:

- common stock $100 (credit)

- Paid in Capital in excess of Par value $5,000 (credit)

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