When a Company Sells Machinery at a Price Equal to Its

question 5

Multiple Choice

When a company sells machinery at a price equal to its book value,this transaction would be recorded with an entry that would include the following:

• A)debit Machinery; credit Cash and Accumulated Depreciation
• B)debit Cash and Machinery; credit Accumulated Depreciation
• C)debit Cash and Depreciation Expense; credit Accumulated Depreciation
• D)debit Cash and Accumulated Depreciation; credit Machinery

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Definitions:

IPO

An Initial Public Offering is the act of a private entity offering its shares to the general public for the first time, thereby transitioning into a public company.

Oversubscription Privilege

is a right or privilege granted to existing shareholders to purchase additional shares in a new issue before it is offered to the public, especially in cases where the demand exceeds the supply.

Rights Offering

A method by which a company raises capital by giving existing shareholders the right to buy additional shares at a discount to the market price before offering them to the public.

General Cash Offer

A public offering of securities to all investors by a company, which involves selling securities directly to the general public to raise capital.