Statement 1: If the company uses the journal entry method, issuance of share capital for cash should be recorded with a credit of Unissued Share Capital account. Statement 2: Subscription Receivable, if collectible within one year is reflected in the shareholders equity section as deduction from the related subscription share capital.

1. Both statements are correct.
2. Both statements are incorrect.
3. Only Statement 2 is correct.
4. Only Statement 1 is correct.

The issuance of shares of preferred stock to shareholders

1. Has no effect on preferred stock outstanding
2. Increases preferred stock authorized
3. Decreases preferred stock authorized
4. Increases preferred stock outstanding

The par value of a share capital is

1. The present value of the share
2. The legal nominal value assigned to the share
3. The liquidation value of the share

The amount received by the corporation when the share capital was originally issued