A Company Receives $100,000 Cash from Investors in Exchange for Stock.Several

question 62

Multiple Choice

A company receives $100,000 cash from investors in exchange for stock.Several weeks later,the company buys a $250,000 machine using all of the cash from the stock issue and signing a promissory note for the remainder.The accounts involved in these two transactions are:

• A)Cash;Equipment;Long-term Investments;and Accounts Payable.
• B)Cash;Long-term Investments;Contributed Capital;and Notes Payable.
• C)Cash;Equipment;Contributed Capital;and Notes Payable.
• D)Equipment;Notes Payable;and Retained Earnings.

---

Definitions:

Decimal Multiplication

A mathematical operation involving the multiplication of numbers represented in decimal form.

Compound Interest

Calculating interest by including both the original principal amount and the interest that has been piled up from former periods.

Exponential Functions

Mathematical functions describing growth or decay at rates proportional to the value of the function at any point in time.

Present Value

The present value of a future sum or cash flow series, considering a determined rate of return.