In Order to Reduce the Risk Associated with a New

Multiple Choice

In order to reduce the risk associated with a new line of business,Conservative Corporation established Spin Company as a wholly owned subsidiary.It transferred assets and accounts payable to Spin in exchange for its common stock.Spin recorded the following entry when the transaction occurred:

-Based on the preceding information,what number of shares of $7 par value stock did Spin issue to Conservative?

A) 10,000
B) 7,000
C) 8,000
D) 25,000