Sanderson Sofas, a family-owned corporation, issued 6.75% bonds with a face amount of $12 million, together with 2 million shares of its $1 par value common stock, for a combined cash amount of $22 million. The market value of Sanderson’s stock cannot be determined. The bonds would have sold for $9 million if issued separately. Sanderson should record for paid-in capital – excess of par on the transaction in the amount of:

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Sanderson Sofas, a family-owned corporation, issued 6.75% bonds with a face amount of $12 million, together with 2 million shares of its $1 par value common stock, for a combined cash amount of $22 million. The market value of Sanderson’s stock cannot be determined. The bonds would have sold for $9 million if issued separately. Sanderson should record for paid-in capital – excess of par on the transaction in the amount of:

A) 8 million
B) 9 million
C) $11 million
D) $13 million

Answer: C

We hope you have got the correct answer to your question “Sanderson Sofas, a family-owned corporation, issued 6.75% bonds with a face amount of $12 million, together with 2 million shares of its $1 par value common stock, for a combined cash amount of $22 million. The market value of Sanderson’s stock cannot be determined. The bonds would have sold for $9 million if issued separately. Sanderson should record for paid-in capital – excess of par on the transaction in the amount of:”, which was part of Accounting MCQs & Answers. Thanks for choosing us.

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