Cole Corporation Issues 12,000 Preference Shares with a $50 Par

question 346

Multiple Choice

Cole Corporation issues 12,000 preference shares with a $50 par value for cash at $60 per share. The entry to record the transaction will consist of a debit to Cash for $720,000 and a credit or credits to

• A) Share Capital-Preference for $720,000.
• B) Share Capital-Preference for $600,000 and Share Premium-Preference for $120,000.
• C) Share Capital-Preference for $600,000 and Retained Earnings for $120,000.
• D) Share Premium for $720,000.

---

Definitions:

Absolute Advantage

The ability of an individual, company, or country to produce more of a good or service with a given amount of resources than competitors.

Comparative Advantage

The ability of an entity to produce a good or service at a lower opportunity cost than others, leading to trade benefits.

Terms Of Trade

The ratio of a country's export prices to its import prices, affecting the volume of goods a country can import for a given level of exports.

Exchange Rate

The value of one currency expressed in terms of another, determining how much of one currency can be exchanged for another.