Dawson Company Issued 800 Shares of No-Par Common Stock for $7,200

question 51

Short Answer

Dawson Company issued 800 shares of no-par common stock for $7,200. Which of the following journal entries would be made if the stock has stated value of $2 per share?

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Definitions:

Par Preferred Stock

Preferred stock with a nominal value assigned at issuance, influencing its redemption and dividend payment.

Paid-In Capital

The amount of money received from shareholders in exchange for shares of the company’s stock.

Retained Earnings

Cumulative net income not distributed to shareholders, used for reinvestment in the business or to pay down debt.

Preferred Stock

A class of ownership in a corporation that has a higher claim on assets and earnings than common stock, often paying fixed dividends.