Chapter-9 - 1 Chapter 9 Omit 437-439 Quiz on Wednesday 1...

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1 Chapter 9 Omit 437-439 Quiz on Wednesday 1. Double Taxation is when corporations pay income taxes on corporate income. -Stockholders, then, pay personal income tax on the cash dividends that they receive from corporations. 2. Type of Organization that gets taxed twice 3. When a company sells its stock above what its par amount is, it is called selling stock above par. IHOP sells its stock for $10, and its par is $.01. This is not a gain, income, or profit for IHOP. With a par value of $.01, IHOP’s entry to record the issuance of the stock is: Cash $$$$ $ Common Stock $$$ Paid-in-Capital in Excess of Par $$$$$$$$ 4. To record the issuance of no-par stock, the company debits the asset received and credits the stock account for the cash value of the asset received. A company issues 3,000 shares of no-par common stock for $20 per share: Cash $$$ $ Common Stock $$$$ 5. Example : La Maison Complete has borrowed $20,000 for inventory and the note payable is due in 4 months, with a starting date of October 1 st (10-1), and is due on February 2 nd (2-2). The interest rate is 9%.
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