Answer the following statements true (T) or false (F)
1. A company cannot report a gain or loss when buying or selling its own stock.
2. When a corporation issues no-par stock, it debits the asset received and credits the stock account.
3. Paid-in capital in excess of par is recorded when no-par stock is issued.
4 Accounting for stated value common stock is identical to accounting for par value stock.
5. A corporation issues 16,000 shares of its $3 stated value common shares. The issue price is $9 per share.
The credit to the Common Stock account is $144,000.
1. TRUE
2. TRUE
3. FALSE
4. FALSE - The stated value stock uses an account titled Paid-In Capital in Excess of Stated.
5. FALSE - Explanation: Common Stock is credited for the 16,000 shares issued times the $3 stated value ($48,000).
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