QS 11-1 Characteristics of corporations LO C1 Of the following statements, which are true for the corporate form of organization? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.) TOwners have limited llability for corporate debts. Directors oversee its buiness affairs. ? Stockholders do not have the power to bind the corporation to contracts. ? Transfer of ownership rights among owners generally does not impact equity. 2 Compared to other forms of organization- capital (financing) is more difficult to accumulate. ? Generally there is no double taxation on corporate income that Is distributed to owners. It is not a separate legal entity from its owners. Chminal Law Exercise 11-2 Accounting for par, stated, and no-par stock issuances LO P1 Rodriguez Corporation issues 6,000 shares of its common stock for $109,800 cash on February 20. Prepare journal entries to record this event under each of the following separate situations. 1. The stock has a $14 par value. 2. The stock has neither par nor stated value. 3. The stock has a $7 stated value. View transaction list Journal entry worksheet 3 Record the issue of 6,000 shares of $14 par value common stock for $109,800 cash. Note: Enter debits before credits. Debit Credit Transaction General Journal Exercise 11-3 Recording stock issuances LO P1 Prepare journal entries to record the following four separate issuances of stock. 1. A corporation issued 10,000 shares of $20 par value common stock for $240,000 ash, 2. A corporation issued 5,000 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $33,000. The stock has a $1 per share stated value. 3. A corporation issued 5,000 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $33,000. The stock has no stated value. 4. A corporation issued 2,500 shares of $50 par value preferred stock for $158,000 cash. View transaction list Journal entry worksheet 4 Record the issue of 10,000 shares of $20 par value common stock for $240,000 cash. Note: Enter debits before credits