Flynn Corp., which is authorized to issue 25,000 shares of no-par common stock, issued 10,000 shares for $150,000. What effect will this event have on the accounting equation?

Question

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When Flynn Corp. issued 10,000 shares of no-par common stock for $150,000, there was an increase in assets (cash) for the same amount - $150,000, and an increase in equity (common stock) for the exact amount of the stock issuance - $150,000. There is no impact on net income at the time of stock issuance. Therefore, the correct option is C which shows an increase in assets and equity by $150,000.