1 Identify the major characteristics of a corporation. The major characteristics of a corporation are separate legal existence, limited liability of stockholders, transferable ownership rights, ability to acquire capital, continuous life, corporation management, government regulations, and additional taxes. 2 Record the issuance of common stock. When the issuance of common stock for cash is recorded, the par value of the shares is credited to Common Stock. The portion of the proceeds that is above or below par value is recorded in a separate paid-in capital account. When no-par common stock has a stated value, the entries are similar to those for par value stock. When no-par stock does not have a stated value, the entire proceeds are credited to Common Stock. 3 Explain the accounting for treasury stock. The cost method is generally used in accounting for treasury stock. Under this approach, Treasury Stock is debited at the price paid to reacquire the shares. The same amount is credited to Treasury Stock when the shares are sold. The difference between the sales price and
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