Answered: A corporation issued 100 shares of $100…

A corporation issued 100 shares of $100 par value preferred stock for $150 per share. The resulting journal entry would include which of the following? A. a credit to common stock B. a credit to cash

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Stockholder's Equity

The stockholders’ equity (often referred to as the book value of the company) is the number of assets available to the stockholder after its entire liabilities is paid off. The stockholders’ equity is also sometimes referred to as owner's equity. The stockholders’ equity or book value generally includes common stock, treasury stock retained earnings. It is an indicator of a company's financial strength and is an important item on the company's balance sheet.

Question

A corporation issued 100 shares of $100 par value preferred stock for $150 per share. The resulting journal
entry would include which of the following?
A. a credit to common stock
B. a credit to cash
C. a debit to paid-in capital in excess of preferred stock
D. a debit to cash

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