A Company Sells 1 Million Shares of Common Stock with No

question 15

Multiple Choice

A company sells 1 million shares of common stock with no par value for $15 a share.In recording the transaction,it would debit:

• A)Cash and credit Additional Paid-in Capital for $15 million.
• B)Cash and credit Common Stock for $15 million.
• C)Common Stock and credit Cash for $15 million.
• D)Common Stock and credit Additional Paid-in Capital for $15 million.

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Definitions:

Five-Year Period

A fixed duration of time equaling five years, often used in contracts, legal agreements, or statutes of limitations.

Perfection

In the context of secured transactions, the legal process by which a secured party establishes the priority of its security interest against third parties.

Financing Statement

A document filed to give public notice of a secured creditor's interest in the property of a debtor, usually used in securing personal property transactions.

Secured Party

A lender or investor who has a legal right or interest in collateral pledged by a borrower to secure repayment of a loan.