7. There is a direct relationship between the par value and market value of common stock: stocks with a low par value have a low market value, while stocks with a high par value have a high market value.

true

false

8. Fairfield Corporation issues 100,000 shares of $1 par value common stock for $10 per share. This transaction:

increase assets and increases liabilities

increases assets and decreases liabilities

Increases assets and increases stockholders equity

increases assets and decreases stockholders equity

9. On January 1, Year 1, Davidson Corporation issues 1,000 shares of $1 par value common stock for $20 per share. Complete the necessary journal entry for the issuance of common stock by indicating the relevant account names and dollar amounts below. If more than one account title is debited or credited, enter the account titles in their alphabetical order.

journal enetry (record the issue of additional common stock

10. The shares of preferred stock issued by Saturn Corporation can be exchanged for common stock. However, any dividends in arrears are lost. Which of the following features are present in the preferred stock issued by Saturn?

Select all answers that apply to this question.

Convertible

redeemable

cumulative

Noncumulative