A company receives $10 million cash from investors in exchange for new common stock.Several weeks later,the company buys a $25 million machinery using all of the cash from the stock issue and signing a promissory note for the remainder.The accounts involved in these two transactions are:

Question

Quizplus · Accepted Answer

The accounts involved in the two transactions are contributed capital (the $10 million received from investors), cash (the $10 million received and used to purchase the machinery), equipment (the $25 million machinery purchased), and notes payable (the promissory note signed for the remainder of the machinery cost). Therefore, choice C is the best answer.

A Company Receives $10 Million Cash from Investors in Exchange