Chisolm Corporation issued 10,000 shares of $5 par common stock for $22 per share. As a result of this transaction, Chisolm's legal capital increased by $50,000.
Answer the following statement true (T) or false (F)
True
Legal capital is the amount of assets that should be maintained as protection for creditors. It is the number of shares multiplied by the par value.
Legal capital = Par value of $5 per share × Number of shares issued of 10,000 = $50,000
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