A public company issues 10,000 shares on November 1 to purchase equipment with a value of $72,000. Assume the company's shares are actively traded with a value of $7 per share. Which statement is true?
A) Equipment is debited for $72,000.
B) Contributed Surplus is credited for $2,000.
C) A gain on sale is credited for $2,000.
D) Common Shares is credited for $70,000.

Question

Quizplus · Accepted Answer

The Answer of A public company issues 10,000 shares on November 1 to purchase equipment with a value of $72,000. Assume the company's shares are actively traded with a value of $7 per share. Which statement is true?
A) Equipment is debited for $72,000.
B) Contributed Surplus is credited for $2,000.
C) A gain on sale is credited for $2,000.
D) Common Shares is credited for $70,000.

A Public Company Issues 10,000 Shares on November 1 to Purchase