When a Company Issues 25,000 Shares of $1 Par Value

question 126

Multiple Choice

When a company issues 25,000 shares of $1 par value common stock for $10 per share,the journal entry for this issuance would include:

• A)A debit to Cash for $25,000.
• B)A debit to Additional Paid-in Capital for $25,000.
• C)A credit to Common Stock for $250,000.
• D)A credit to Additional Paid-in Capital for $225,000.

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Definitions:

Financial Plan

A comprehensive evaluation of an individual's or organization's current and future financial state by using known variables to predict future cash flows, asset values, and withdrawal plans.

Time Horizon

The length of time over which an investment or a project is expected to unfold or achieve certain goals.

Securities Analysts

Professionals who evaluate and report on the financial health and prospects of companies and industries, often focusing on predicting future earnings and market movements.

Financial Projections

Estimates of future financial performance, including income, expenses, and cash flow, over a set period.