New Corpissues 2,000 Ordinary Shares with a $10 Par Value at at $14

question 58

Multiple Choice

New Corp.issues 2,000 ordinary shares with a $10 par value at $14 per share.When the transaction is recorded, credits are made to

• A)Share Capital-Ordinary $8,000 and Share Premium-Ordinary $20,000.
• B)Share Capital-Ordinary $28,000.
• C)Share Capital-Ordinary $20,000 and Share Premium-Ordinary $8,000.
• D)Share Capital-Ordinary $20,000 and Retained Earnings $8,000.

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Definitions:

Tax Rate

How much of an individual's or a business's income is taken as tax by the government.

CCA Class

A classification within the Capital Cost Allowance system in Canada, grouping assets with similar properties for depreciation purposes.

Net Advantage To Leasing

The benefits a company realizes from leasing assets rather than purchasing them, considering cost savings, tax advantages, and flexibility.

Estimated Life

The expected duration or lifespan of an asset, affecting depreciation calculations and investment decisions.