hich one of the following entries would nof be likely to be made by a corporatio

Question

hich one of the following entries would nof be likely to be made by a corporation? a. Land Xx Common Stock, 10 stated value Additional Paid-in Capital on Common StockX Common Stock, no-par Additional Paid-in Capital on Common StockX b. Cash c. Cash Subscriptions Receivable: Conmon Stock XX Additional Paid-in Capital on Common StockX d. Building Discount on Common Stock Common Stock, $10 par nonmonctary exchange. This transaction should be 6 A company is exchanging its common stock for land in a valued based upon the a. fair value of the stock b. fair value of the land fair value of the stock issued and the land received d) fair value of the stock issued and the land received, whichever is more reliable Werling Co. had 10,000 shares of S8 par common stock outstanding just prior to a stock split. The stock was split two-for-one and the par value was reduced to $3. Which entry correctly records this stock split? a. Common Stock, $8 par 7. 80, 000 80,000 Common Stock, $3 par Stock, s8 par 80,000 Common Stock, $3 par lo,ose a Additional aid-in cap tai from Stock sp1t 20, 000 o,000 60,0 60,000 20,000 c. Common Stock, $8 par Connon Stock, 3 par Gain on Stock Split 80,000 d. Common Stock, $8 par Common Stock, 93 par Capital Surplus 60,000 20,000 S. Which of the following methods should be used to account for the conversion of preferred stock to common stock? Acon Book Value Market Value No I. Yes Yes H No IV No No

Explanation / Answer

5.

Journal entries b and d would not be likely to be made by a corporation.

Reason:

Journal entry a would not be made by a corporation because when no-par common stock is issued, there is no additional paid in capital. The journal entry to record issuance of no-par common stock is to debit cash and credit common stock.

Journal entry d would not be made by a corporation because common stock is never issued on a discount.

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