Companies should record stock issued for services or property other than cash at either the fair value of the stock issued or the fair value of the noncash consideration received, whichever is more clearly determinable

Accounting Oct 08, 2020

Companies should record stock issued for services or property other than cash at either the fair value of the stock issued or the fair value of the noncash consideration received, whichever is more clearly determinable.

Select one:

a. True.

b. False.

X borrowed $400,000 on April 1. The note requires interest at 12% and principal to be paid in one year. How much interest is recognized for the period from April 1 to December 31?

Select one:

a. $36,000.

b. $0.

c. $48,000.

d. $32,000.

Expert Solution

1) When company issued common Stock Then consideration would be cash but if Consideration is not cash then equipment or other assets fair value would be use as consideration of Common stock.

So if fair value of stock or land, property is more determinable used as Common Stock consideration

So above statement is true

2) Interest expense = 400000*12%*9/12 = 36000

So answer is a) $36000

Archived Solution

Unlocked Solution

You have full access to this solution. To save a copy with all formatting and attachments, use the button below.

Already a member? Sign In

Important Note: This solution is from our archive and has been purchased by others. Submitting it as-is may trigger plagiarism detection. Use it for reference only.

For ready-to-submit work, please order a fresh solution below.

Or get 100% fresh solution

Get Custom Quote