Assume that a start-up manufacturing company raises capital through a series of equity issues.
(a) Using the financial statement template below, summarize the financial statement effects of the following transactions.
Identify the account affected and use plus and minus signs to indicate the increases and decreases in the specific element of the balance sheet (assets, liabilities, components of shareholders’ equity).
(1) Issues 100,000 shares of $1 par value common stock for $10 per share.
(2) Receives land in exchange for 10,000 shares of $1 par common stock when the common stock is trading in the market at $15 per share. The land has no readily determinable market value.
(b) In each case, how does the company measure the transaction? What
measurement attribute is used?

Assets = Liabilities + Stockholders Equity
CC AOCI RE
Journal Entry:

11.     before adding cream to a simmering soup, you need to a. simmer the cream. b. chill the cream. c. strain the cream through cheesecloth. d. allow the cream reach room temperature. student d   incorrect which answer is right?

Bathlinks corporation has a debt to assets ratio of 73%. this tells the user of bathlinks’s financial statements that a. bathlinks is getting a 27% return on its assets. b. there is a risk that bathlinks cannot pay its debts as they come due. c. 73% of the assets are financed by the stockholders. d. based on this measure, the user should not invest in bathlinks.

On january 1, 2018, wetick optometrists leased diagnostic equipment from southern corp. which had purchased the equipment at a cost of $2,256,342. the lease agreement specifies six annual payments of $490,000 beginning january 1, 2018, the beginning of the lease, and at each december 31 thereafter through 2022. the six-year lease term ending december 31, 2023 (a year after the final payment), is equal to the estimated useful life of the equipment. the contract specifies that lease payments for each year will increase on the basis of the increase in the consumer price index for the year just ended. thus, the first payment will be $490,000, and the second and subsequent payments might be different. the cpi at the beginning of the lease is 120. southern routinely acquires diagnostic equipment for lease to other firms. the interest rate in these financing arrangements is 12%. (fv of $1, pv of $1, fva of $1, pva of $1, fvad of $1 and pvad of $1) prepare the appropriate journal entries for wetick and southern to record the lease at its beginning.