In order to reduce the risk associated with a new line of business,Conservative Corporation established Spin Company as a wholly owned subsidiary.It transferred assets and accounts payable to Spin in exchange for its common stock.Spin recorded the following entry when the transaction occurred:

-Based on the preceding information,what number of shares of $7 par value stock did Spin issue to Conservative?
A)10,000
B)7,000
C)8,000
D)25,000

Question

In order to reduce the risk associated with a new line of business,Conservative Corporation established Spin Company as a wholly owned subsidiary.It transferred assets and accounts payable to Spin in exchange for its common stock.Spin recorded the following entry when the transaction occurred:
 
-Based on the preceding information,what number of shares of $7 par value stock did Spin issue to Conservative?
A)10,000 
B)7,000 
C)8,000 
D)25,000

Quizplus · Accepted Answer

The entry shows that Spin issued 8,000 shares of common stock to Conservative Corporation in exchange for the assets and accounts payable.

In Order to Reduce the Risk Associated with a New