A company issued rights to its existing shareholders to purchase,for $30 per share,unissued shares of $15 par value common stock.When the rights lapse,
A) Additional Paid-In Capital will be credited.
B) Stock Rights Outstanding will be debited.
C) Gain on Lapse of Stock Rights will be credited.
D) no entry will be made.

Question

Quizplus · Accepted Answer

When the rights lapse, no entry is made because the rights are essentially options given to shareholders that expire if not exercised; there's no financial transaction to record.

A Company Issued Rights to Its Existing Shareholders to Purchase,for