Question

On June 1, the company issued common stock to investors in exchange for $5,000 cash. What is the amount of cash received by the company?

1) $5,000
2) $10,000
3) $15,000
4) $20,000

Answer 1

The company received $5,000 in cash when it issued common stock to investors.

Step-by-step explanation:

The amount of cash received by the company when they issued common stock to investors on June 1 for $5,000 is exactly that amount: $5,000. This is a straightforward financial transaction where the company exchanges shares of its stock for money from investors. The question presented is a basic business accounting question, focusing on the recording of equity transactions in a company's financial statements.