Osbourne Company issued 50,000 shares of common stock in exchange for manufacturing equipment. The equipment was valued

Question:

Osbourne Company issued 50,000 shares of common stock in exchange for manufacturing equipment. The equipment was valued at $1,000,000. The stock has par value of $0.01 per share. The entry to record this transaction would include which of the following line items?

Debit Cash $5,000.

Credit Gain on sale of common stock $1,050,000.

Credit Paid - in capital $999,500.

Credit Common stock $1,000,000.

Common Stock
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... 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,...