Mountain Water Corp. issued common stock of $28,000 to pay off long-term notes payable of $28,000. In what section (s) would these transactions be recorded?

A) Financing activities payment of note, $ (28,000)

B) Financing activities cash receipt, $28,000

C) Non-cash investing and financing activities, $28,000

D) Both A and B are correct

Question

Business

Scott Horton

7 May, 12:02

Mountain Water Corp. issued common stock of $28,000 to pay off long-term notes payable of $28,000. In what section (s) would these transactions be recorded?

A) Financing activities payment of note, $ (28,000)

B) Financing activities cash receipt, $28,000

C) Non-cash investing and financing activities, $28,000

D) Both A and B are correct

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Answers (1)

Know the Answer?

Fernando Shepherd · Answer 1

D) Both A and B are correct

Explanation:

The company issued common stock and get the cash.

Then it used to pay off note payable for the same amount.

We must remember that the accounting follow the

Full disclosure principle.

The transactions cannot be "resume" into one.

thre was two diferent transactions so both should be disclosure.