Which One of the Following Transactions Occurs in the Primary

question 5

Multiple Choice

Which one of the following transactions occurs in the primary market?

• A)The repurchase of GHI stock from Tim by GHI
• B)The tax-free gift of DEF stock to Heather by Jennifer
• C)The sale of ABC stock by Fred Jones to Mary Smith
• D)The transfer of MNO stock from Tom to his son, Jon
• E)The initial sale of JKL stock by JKL to Jamie

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Definitions:

Lease Payments

Regular payments made by a lessee to a lessor in exchange for the right to use an asset, such as real estate or equipment.

Bonds Payable

Long-term liabilities representing money owed by an entity to bondholders, to be paid back at a specified future date with interest.

General Journal Entry

A record of financial transactions in the general journal that includes the date, accounts affected, amounts, and a brief description.

Interest Payment

The payment made by a borrower to a lender for the privilege of borrowing money, usually expressed as a percentage of the principal amount.