Eagle Eye,Inc.,a corporation,received an additional investment of $6,000 cash in exchange for shares of capital stock.How does this transaction affect Eagle Eye's accounts?

Question

Quizplus · Accepted Answer

When Eagle Eye, Inc. receives an additional investment of $6,000 in exchange for shares of capital stock, it increases the company's cash by $6,000, which is reflected as a debit in the cash account. At the same time, it increases the company's capital stock by $6,000, which is reflected as a credit in the capital stock account. Therefore, option B, which states "increase capital stock and increase cash by $6,000 each" is the correct answer. Options A, C, and D are incorrect because they do not accurately reflect the effects of this transaction on Eagle Eye's accounts.