When Bayou Corporation Was Formed on January 1, 20xx, the Corporate

question 8

Multiple Choice

When Bayou Corporation was formed on January 1, 20xx, the corporate charter provided for 100,000 share of $10 par value common stock. The following transaction was among those engaged in by the corporation during its first month of operation: The corporation issued 9,000 shares of stock at a price of $23 per share. The entry to record the above transaction would include a

• A) debit to Cash for $90,000
• B) credit to Common Stock for $207,000
• C) credit to Paid in Capital in Excess of Par for $117,000
• D) debit to Common Stock for $90,000

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Definitions:

Consider Producing

Evaluating or thinking about creating, manufacturing, or bringing forth goods or products.

Mirror Image Rule

A common law rule that requires, for a valid contractual agreement, that the terms of the offeree’s acceptance adhere exactly to the terms of the offeror’s offer.

Acceptance Terms

Conditions under which an offer can be accepted, forming a binding contract between the offering and accepting parties.

Offer Terms

The specific conditions, including price, duration, and duties, outlined in a proposal to enter into a contract or agreement.