If Vickers Company Issues 5,000 Shares of $5 Par Value

question 218

Multiple Choice

If Vickers Company issues 5,000 shares of $5 par value common stock for $175,000,

• A) Common Stock will be credited for $175,000.
• B) Paid-In Capital in Excess of Par will be credited for $25,000.
• C) Paid-In Capital in Excess of Par will be credited for $150,000.
• D) Cash will be debited for $150,000.

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Definitions:

Market Price

The current price at which an asset or service can be bought or sold in a marketplace.

Call Option

A financial contract giving the buyer the right, but not the obligation, to buy a stock, bond, commodity, or other asset or instrument at a specified price within a specific time period.

Exercise Price

The cost at which an option's owner is allowed to purchase (for a call option) or sell (for a put option) the underlying asset.

Stock Price

Stock Price is the cost of purchasing a share of a company as listed on a stock exchange, reflecting the market's valuation of the company.