Which of the Following Would Be Included in the Entry

question 132

Multiple Choice

Which of the following would be included in the entry to record the issuance of 5,000 shares of $10 par value common stock at $13 per share cash?

• A) Cash would be debited for $65,000.
• B) Common stock would be debited for $50,000.
• C) Common stock would be credited for $65,000.
• D) Paid-in capital in excess of par-common would be debited for $5,000.

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Definitions:

Second Mortgage Bonds

A type of bond secured by a second-priority claim on the collateral that has already been pledged for another bond.

Floating-Rate Debt

Debt securities with interest rates that reset periodically, based on a benchmark interest rate or index, thus providing protection against interest rate fluctuations.

Interest Rate Risk

The potential for investment losses that result from a change in interest rates, affecting debt instruments like bonds inversely to their price.

Investors

Investors are individuals or institutions that allocate capital with the expectation of receiving financial returns.