Osbourne,Inc

question 12

Multiple Choice

Osbourne,Inc.issued 60,000 shares of common stock in exchange for manufacturing equipment.The equipment has a fair value of $1,420,000.The stock has a par value of $0.05 per share.The journal entry to record this transaction includes a ________.

• A)debit to Cash for $14,170,000
• B)credit to Gain on Sale of Common Stock for $1,480,000
• C)credit to Paid-In Capital in Excess of Par-Common for $1,417,000
• D)credit to Common Stock-$0.05 Par Value for $1,420,000

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Definitions:

Marginal Social Benefit

The additional benefit to society from producing one extra unit of a good or service.

Marginal Social Cost

The complete expense incurred by society when one more unit of a product or service is created, encompassing both personal expenses and any external factors.

Marginal Benefit

The enhancement in satisfaction or benefit achieved by using or producing another unit of a product or service.

External Costs

Costs of an economic activity that are not borne by the participants in the activity but are imposed on others, such as pollution.