A Corporation Issued 6,000 Shares of Its $2 Par Value

question 138

Multiple Choice

A corporation issued 6,000 shares of its $2 par value common stock in exchange for land that has a market value of $84,000.The entry to record this transaction would include:

• A)A debit to Common Stock for $12,000.
• B)A debit to Land for $12,000.
• C)A credit to Land for $12,000.
• D)A credit to Paid-in Capital in Excess of Par Value,Common Stock for $72,000.
• E)A credit to Common Stock for $84,000.

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Definitions:

Strip Bond

A debt security that has had its main components, such as periodic interest payments, separated, leaving only the principal to be repaid at maturity.

Discount Rate

The interest rate charged by central banks to commercial banks for loans and advances, influencing monetary policy and overall economy.

Compounded Semi-Annually

Interest calculation method where interest is added to the principal twice a year, leading to interest on interest.

Strip Bonds

Bonds that have had their principal and coupon payments separated, creating individual securities from each interest payment and the principal.