9. Thornwood Partners Ltd. began business on January 1, 2022. The corporate charter authorized issuance of unlimited no par value common shares, and 8,000 $3 stated value, 10% cumulative preferred shares. On July 1, Thornwood issued 20,000 common shares in exchange for two years' rent on a retail location. The cash rental price is $3,000 per month and the rental period begins on July 1. What is the correct entry to record the July 1 transaction? a.Debit to Cash, $72,000; Credit to Prepaid Rent, $57,600 b.Debit to Prepaid Rent, $72,000; Credit to Common Shares, $72,000 c.Debit to Prepaid Rent, $72,000; Credit to Common Shares, $60,000; Credit to Contributed Surplus—Common Shares, $12,000 d.Debit to Prepaid Rent, $72,000; Credit to Common Shares, $20,000; Credit to Contributed Surplus—Common Shares, $52,000
9. Thornwood Partners Ltd. began business on January 1, 2022. The corporate charter authorized issuance of unlimited no par value common shares, and 8,000 $3 stated value, 10% cumulative preferred shares. On July 1, Thornwood issued 20,000 common shares in exchange for two years' rent on a retail location. The cash rental price is $3,000 per month and the rental period begins on July 1. What is the correct entry to record the July 1 transaction? a.Debit to Cash, $72,000; Credit to Prepaid Rent, $57,600 b.Debit to Prepaid Rent, $72,000; Credit to Common Shares, $72,000 c.Debit to Prepaid Rent, $72,000; Credit to Common Shares, $60,000; Credit to Contributed Surplus—Common Shares, $12,000 d.Debit to Prepaid Rent, $72,000; Credit to Common Shares, $20,000; Credit to Contributed Surplus—Common Shares, $52,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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9.
Thornwood Partners Ltd. began business on January 1, 2022. The corporate charter authorized issuance of unlimited no par value common shares, and 8,000 $3 stated value, 10% cumulative
a.Debit to Cash, $72,000; Credit to Prepaid Rent, $57,600
b.Debit to Prepaid Rent, $72,000; Credit to Common Shares, $72,000
c.Debit to Prepaid Rent, $72,000; Credit to Common Shares, $60,000; Credit to Contributed Surplus—Common Shares, $12,000
d.Debit to Prepaid Rent, $72,000; Credit to Common Shares, $20,000; Credit to Contributed Surplus—Common Shares, $52,000
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