Abilene Western Shop began business on January 1,2017.The corporate charter authorized issuance of 10,000 shares of $2 par value common stock and 4,000 shares of $8 par value,6% cumulative preferred stock.Abilene issued 2,400 shares of common stock for cash at $20 per share on January 2,2017.What effect does the entry to record the issuance of stock have on total stockholders' equity?

Question

Quizplus · Accepted Answer

The issuance of 2,400 shares of $2 par value common stock at $20 per share results in an increase in total stockholders' equity by $48,000 ($2 x 2,400 shares x $20 per share).

Abilene Western Shop Began Business on January 1,2017