Question

Fairfield Corporation issues 100,000 shares of $1 par value common stock for $10 per share. This transaction: a. increases assets and increases liabilities.
b. increases assets and decreases liabilities.
c. increases assets and increases stockholders’ equity.
d. increases assets and decreases stockholders’ equity.

Answer 1

Answer:

C

Explanation:

When a company issues shares they receive money which is an asset and the number of shares issued represent shareholders' interest in the company. I.e shareholders equity. So the correct answer is C.