Which of the Following Describes the Receipt of $6,000 from the Issuance

question 42

Multiple Choice

Which of the following describes the receipt of $6,000 from the issuance of common stock?

• A)Debit liabilities and credit sharholders' equity
• B)Debit shareholders' equity and credit assets for $6,000
• C)Debit assets and credit shareholders' equity for $6,000
• D)Debit liabilities and credit assets for $6,000

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Definitions:

Operating Lease Arrangement

A contract that allows for the use of an asset but does not transfer ownership rights of the asset to the lessee.

Lease Income

Income generated from leasing out assets or property to another party under a lease agreement.

Finance Lease Classification

The categorization of a lease as a finance lease, indicating that substantially all risks and rewards of ownership are transferred to the lessee.

Implicit Interest Rate

The interest rate implied in the lease payments of a leasing agreement, used in lease accounting to determine lease liabilities and right-of-use assets.