Do firms capitalize stock issue costs as intangible assets on the balance sheet? Explain.

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A.

No, firms do not capitalize stock issue costs as an intangible asset on the balance sheet. Any stock issue costs are reported on the income statement as operating expenses.

B.

No, firms do not capitalize stock issue costs as an intangible asset on the balance sheet. Any stock issue costs are usually treated as a reduction of additional paid-in capital.

C.

Yes, firms do capitalize stock issue costs as an intangible asset on the balance sheet. Any stock issue costs are also reported on the income statement as operating expenses.

D.

Yes, firms do capitalize stock issue costs as an intangible asset on the balance sheet. Stock issue costs are usually treated as an increase of additional paid-in capital.