Pustay Parts Shop began business on January 1,2012.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.Pustay issued 2,400 shares of common stock for cash at $20 per share on January 2,2012.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 common stock at $20 per share results in an increase in total stockholders' equity by $48,000 (2,400 shares x $20).

Pustay Parts Shop Began Business on January 1,2012