1. Bradley Corporation issued 10,000 shares of common stock on January 1, 2013. The stock has par value of $0.01 per share and was sold at $25 per share. The journal entry for this transaction would:
a) debit Cash $250,000, credit Paid-in capital $100, and credit Common stock $249,900.
b) credit Cash $250,000 and debit Paid-in capital $250,000.
c) credit Cash $250,000, debit Common stock $100, and debit Paid-in capital $249,900.
d) debit Cash $250,000, credit Common stock $100, and credit Paid-in capital $249,900.
2. On November 1, 2014, Oster Company declared a dividend of $3.00 per share. Oster Company has 20,000 shares of common stock outstanding and no preferred stock. The date of record is November 15, and the payment date is November 30, 2014. Which of the following statements is TRUE about the date of record?
a) No journal entry is made on the date of record.
b) The liability must be recorded on the date of record.
c) Cash is disbursed to shareholders on the date of record.
d) The company transfers cash to a brokerage firm on the date of record.
3. Which of the following statements is TRUE about a bond that is issued at a discount?
a) It will be sold at par.
b) Its interest rate is higher than the prevailing market rate.
c) It will repay principal at less than the face value.
d) It will be sold for less than the face value.