Suppose 100 Common Shares Are Issued for $12

question 95

Multiple Choice

Suppose 100 common shares are issued for $12.50 per share.The entry to record this issuance includes a:

• A) credit to Retained Earnings for $1,250
• B) credit to Common shares for $1,250
• C) credit to Contributed Surplus for $250
• D) debit to Preferred Shares for $1,000

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Definitions:

Premium Rate

Premium Rate refers to the higher than standard price or fee charged for a product, service, or insurance policy, often in exchange for additional benefits or coverages.

Fire Damages

Loss or destruction of property resulting from fire, encompassing structural and content damage.

Coinsurance Clause

A provision in insurance policies that requires the policyholder to bear a portion of the costs of a claim, encouraging insured parties to avoid excessive risks.

Insurance Company

An organization that offers risk management in the form of insurance policies, providing financial protection against loss or harm in return for premium payments.