Question

The sale of common stock below par

A. is not permitted in most states.
B. is a common occurrence in most states.
C. requires that a liability be recorded for the difference between the sales price and the par value of the shares.
D. is a practice that most stockholders encourage.

Answer 1

Answer:

Option A: it is not permitted in most states

Step-by-step explanation:

Common Stock is simply a security or the form of security that shows an equity claim, voting rights, and claim on residual income of the firm. It shows or states the ownership in a corporation. Usually if and when you want to get (buying) common stocks, you are buying the corporation's factories, buildings, and products.

Par value stock is known as acapital stock that has been put in place(assigned) value per share in the corporate charter. The issuance of common stock affects the paid-in capital