Selected Transactions of Alton Company Are Listed Below

question 71

Essay

Selected transactions of Alton Company are listed below.
1. Common stock is sold for cash above par value.
2. Bonds payable are issued for cash at a discount.
3. Interest receivable on a short-term note receivable is collected.
4. Land is sold for cash at book value.
5. Accounts payable are paid in cash.
6. Equipment is purchased by signing a 3-year 10% note payable.
7. Cash dividends on common stock are declared and paid.
8. 100 shares of XYZ common stock are purchased for cash.
9. Merchandise is sold to customers for cash.
10. Bonds payable are converted into common stock.
Instructions
Classify each transaction as either (a) an operating activity (b) an investing activity (c) a financing activity or (d) a noncash investing and financing activity.

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Definitions:

Debtors

Individuals or entities that owe money or are indebted to another party.

Defaulting Borrower

An individual or entity that fails to meet the legal obligations of loan repayment according to the terms of the loan agreement.

Foreclosure Sale

The process of selling an asset, typically real estate, to fulfill an obligation or debt that the owner has failed to pay.

Unsecured Party

A lender or creditor who provides credit without obtaining specific collateral as security for the loan.