Premium

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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.

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