BBC Co. issues 7,000 common stocks has a $3.5 PAR value per stock, for $2.5 cash per stock, the journal include the following entry: Discount on common stock $7,000 Premium on common stocks $7,000 Credit cash account with $17,500 Debit cash account with $24,500

BBC Co. issues 7,000 common stocks has a $3.5 PAR value per stock, for $2.5 cash per stock, the journal include the following entry: Discount on common stock $7,000 Premium on common stocks $7,000 Credit cash account with $17,500 Debit cash account with $24,500

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter14: Corporation Accounting

Section: Chapter Questions

Problem 10MC: A company issued 40 shares of $1 par value common stock for $5,000. The journal entry to record the...

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Concept explainers

Stockholder's Equity

The stockholders’ equity (often referred to as the book value of the company) is the number of assets available to the stockholder after its entire liabilities is paid off. The stockholders’ equity is also sometimes referred to as owner's equity. The stockholders’ equity or book value generally includes common stock, treasury stock retained earnings. It is an indicator of a company's financial strength and is an important item on the company's balance sheet.

Question

BBC Co. issues 7,000 common stocks has a $3.5 PAR value per stock, for $2.5 cash per stock, the journal include the
following entry:
Discount on common stock $7,000
Premium on common stocks $7,000
Credit cash account with $17,500
Debit cash account with $24,500

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