Halo Corporation repaid an $8,000 note payable by issuing 500 shares of its $4.00 par value capital stock.The effect of this transaction on Halo Corporation would be to

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When Halo Corporation repays the $8,000 note payable by issuing 500 shares of its $4.00 par value capital stock, the capital stock at par will increase by $2,000 (500 shares × $4.00 par value). The remaining $6,000 ($8,000 note payable - $2,000 par value of stock issued) will increase the "paid-in capital in excess of par" account. Therefore, the effect of this transaction on Halo Corporation will increase the capital stock at par by $2,000, increase the paid-in capital in excess of par account by $6,000, and decrease the notes payable account by $8,000.

Halo Corporation Repaid an $8,000 Note Payable by Issuing 500