On January 1, 2020, Castaway Corp. issued 5,000 shares of preferred stock ($15 par value) at $45 per share. Each share of preferred stock is redeemable at the option of the stockholder at $45 per share. On September 1, 2020, preferred shareholders holding 1,000 shares of preferred stock redeemed their stock. The entry recorded by Castaway Corp. on September 1, 2020, would include the following: A. B. C. D. No net change to stockholders' equity. A decrease to retained earnings for $5,000. A decrease to assets for $45,000. No net change to preferred stock outstanding.
On January 1, 2020, Castaway Corp. issued 5,000 shares of preferred stock ($15 par value) at $45 per share. Each share of preferred stock is redeemable at the option of the stockholder at $45 per share. On September 1, 2020, preferred shareholders holding 1,000 shares of preferred stock redeemed their stock. The entry recorded by Castaway Corp. on September 1, 2020, would include the following: A. B. C. D. No net change to stockholders' equity. A decrease to retained earnings for $5,000. A decrease to assets for $45,000. No net change to preferred stock outstanding.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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don't give answer in image format
![On January 1, 2020, Castaway
Corp. issued 5,000 shares of
preferred stock ($15 par value) at
$45 per share. Each share of
preferred stock is redeemable at
the option of the stockholder at
$45 per share. On September 1,
2020, preferred shareholders
holding 1,000 shares of preferred
stock redeemed their stock.
The entry recorded by Castaway
Corp. on September 1, 2020,
would include the following:
A.
B.
C.
D.
No net change to
stockholders' equity.
A decrease to retained
earnings for $5,000.
A decrease to assets
for $45,000.
No net change to
preferred stock
outstanding.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Faadd23fc-54ac-4ee8-94d2-3a947a8bc409%2Fb1e32911-dc1e-4c5f-aa60-0d200297866a%2Fvw2isfh_processed.jpeg&w=3840&q=75)
Transcribed Image Text:On January 1, 2020, Castaway
Corp. issued 5,000 shares of
preferred stock ($15 par value) at
$45 per share. Each share of
preferred stock is redeemable at
the option of the stockholder at
$45 per share. On September 1,
2020, preferred shareholders
holding 1,000 shares of preferred
stock redeemed their stock.
The entry recorded by Castaway
Corp. on September 1, 2020,
would include the following:
A.
B.
C.
D.
No net change to
stockholders' equity.
A decrease to retained
earnings for $5,000.
A decrease to assets
for $45,000.
No net change to
preferred stock
outstanding.
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