Mountain Water Corp. issued common stock of $28,000 to pay off long-term notes payable of $28,000. In what section(s) would these transactions be recorded?
A. Financing activities payment of note, $(28,000)
B. Financing activities cash receipt, $28,000
C. Non-cash investing and financing activities, $28,000
D. Both a and b are correct
Ans: C. Non-cash investing and financing activities, $28,000
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On July 1, 20A, Goode Company borrowed $10,000. The company signed a note payable with interest at 12 percent per year. The note and interest are due on December 31, 20A. On December 31, 20A, Goode paid $10,600 to settle the debt in full. Transaction analysis of the $10,600 cash payment on December 31, 20A, should reflect the following (before any adjusting entries are made):
A. decrease assets, $10,600; decrease liabilities, $10,600. B. decrease assets, $10,000; decrease stockholders' equity, $600; and decrease liabilities, $10,600. C. decrease stockholders' equity, $10,000; decrease liabilities, $600; and decrease assets, $10,600. D. decrease liabilities, $10,000; decrease stockholders' equity, $600; and decrease assets, $10,600.
Why is it more difficult to choose a good life insurance policy than to choose a good auto insurance policy?
A) People don't like thinking about death or dying, and thus cannot be objective in the selection process. B) Most people rarely need life insurance, while auto insurance is required by law. C) Life insurance policies are not standardized, while many non-life policies are. D) Both B and C are correct.