Poole Company Began Business on January 1, 2015

question 23

Multiple Choice

Poole Company began business on January 1, 2015.The corporate charter authorized issuance of 5,000 shares of $1 par value common stock, and 4,000 shares of $8 par value, 6% cumulative preferred stock.None of the preferred shares were issued.On July 1, Poole issued 1,000 shares of common stock in exchange for two years rent on a retail location.The cash rental price is $2,400 per month and the rental period begins on July 1.The correct entry to record the July 1 transaction will

• A)Increase Cash, $57,600; Decrease Prepaid Rent, $57,600
• B)Increase Prepaid Rent, $57,600; Increase Common Stock, $57,600
• C)Increase Prepaid Rent, $57,600; Increase Common Stock, $1,000; Increase Additional Paid­in Capital-Common, $56,600
• D)Increase Prepaid Rent, $57,600; Increase Common Stock, $5,000; Increase Additional Paid­in Capital-Common, $52,600

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Definitions:

Wildly Optimistic

Characterized by an extremely positive and confident expectation for the future, often beyond what is considered realistic.

Major Depressive Disorder

A psychiatric condition characterized by persistent feelings of sadness, loss of interest in activities, and other symptoms that disrupt daily functioning.

Sluggishness

A state of reduced activity or slow movements, often indicative of fatigue or lack of energy.

Inactivity

The lack of movement or action, oftentimes leading to negative impacts on physical and mental health.