Laura Cisneros and Kay Osborn are equal partners in Creative Toys Nook. Cisneros and Osborn have decided
Question:
The trial balance shown below was prepared after the firm's accounting records were closed at the end of its fiscal year on December 31, 2016, and the assets were revalued as agreed on.
Instructions
1. In the corporation's general journal, record a memorandum entry describing its formation on December 31, 2016.
2. Make general journal entries as of December 31 to show the takeover of the assets and liabilities of the partnership and the issuance of stock in payment to Laura Cisneros and Kay Osborn. Use the same account names that the partnership used for assets and liabilities. Also use the following new account titles: Common Stock and Preferred Stock.
Analyze: After the corporation's formation, what is the fundamental accounting equation for Toy Chest Corporation?
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,... Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...
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Related Book For
College Accounting Chapters 1-30
ISBN: 978-0077862398
14th edition
Authors: John Price, M. David Haddock, Michael Farina
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