Question: Company S has 4,000 shares outstanding and a total stockholders equity of $200,000. It is about to issue 6,000 new shares to the prospective parent

Company S has 4,000 shares outstanding and a total stockholders’ equity of $200,000. It is about to issue 6,000 new shares to the prospective parent company. The shares will be sold for a total of $650,000. Will there be an excess of cost over book value? If so, how will it likely be accounted for?

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