Suppose a Corporation Issues 5,000 Shares of $1 Par Common

question 64

Multiple Choice

Suppose a corporation issues 5,000 shares of $1 par common stock for $30 per share. In addition to the increase in cash, what effect does this transaction have on the accounting equation?

• A)Retained earnings increases $150,000.
• B)Paid-in capital in excess of par increases $145,000.
• C)Common stock increases $150,000.
• D)Gain on stock issuance increases $145,000.