A Company Purchased Machinery by Issuing 2,000 Shares of $3

question 90

Multiple Choice

A company purchased machinery by issuing 2,000 shares of $3 par value common stock.Since the company is new,there is no established market price for its stock.How would the company record the transaction?

• A)In terms of the par value of the stock issued
• B)At the fair market value of the machine
• C)At the cost recorded by the previous owner of the machine
• D)Recording the transaction would be postponed until a market price for the stock could be determined.

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Definitions:

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