Question

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

Answer 1

D) Both A and B are correct

Step-by-step 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.