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17 July, 20:34

Ogilvie Corp. issued 23,000 shares of no-par stock for $10 per share. Ogilvie was authorized to issue 46,000 shares. What effect will this event have on the company's financial statements?

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  1. 17 July, 20:42
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    Oglivie Corp.'s assets (cash account) will increase be $230,000 and its equity (common stock account) will also increase by $230,000.

    Every time a company issues stock and sells them, both its assets and equity have to increase in order to keep a balance in the balance sheet. Since Oglivie's stock are no-par, all of the money received should be included in the common stock account.
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