ACC 304 Course Great Wisdom / tutorialrank.com ACC 304 Course Great Wisdom / tutorialrank.com | Page 327

7. Companies should record stock issued for services or noncash property at either the fair value of the stock issued or the fair value of the consideration received. 8. Treasury stock is a company’s own stock that has been reacquired and retired 9. The cost method records all transactions in treasury shares at their cost and reports the treasury stock as a deduction from capital stock. 10. When a corporation sells treasury stock below its cost, it usually debits the difference between cost and selling price to Paid-in Capital from Treasury Stock. 11. Participating preferred stock requires that if a company fails to pay a dividend in any year, it must make it up in a later year before paying any common dividends. 12. Callable preferred stock permits the corporation at its option to redeem the outstanding preferred shares at stipulated prices.