Suppose a Corporation Issues 5,000 Shares of $1 Par Common

question 64

Multiple Choice

Suppose a corporation issues 5,000 shares of $1 par common stock for $30 per share. In addition to the increase in cash, what effect does this transaction have on the accounting equation?

• A)Retained earnings increases $150,000.
• B)Paid-in capital in excess of par increases $145,000.
• C)Common stock increases $150,000.
• D)Gain on stock issuance increases $145,000.

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Definitions:

Ribosomes

Cellular structures that synthesize proteins by translating mRNA into polypeptide chains.

Polypeptide

A linear organic polymer consisting of a large number of amino acid residues bonded together, forming part of (or the whole of) protein molecules.

mRNA

Messenger RNA, a type of RNA that carries genetic information from DNA to the ribosome, where it specifies the amino acid sequence of the protein products of gene expression.

Triphosphate Group

A triphosphate group consists of a molecule containing three phosphate groups, and it's most commonly associated with adenosine triphosphate (ATP), which is a primary energy carrier in cells.