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The journal entry for the common stock should be made as follows; Debit equipment $42,000.
What is common stock?
A security that symbolizes ownership in a firm is called common stock. Common stock owners choose the board of directors and cast ballots for corporate rules. Long-term rates of return are often higher with this type of stock ownership. The rights of common shareholders to a company's assets in the case of liquidation, however, begin only after bondholders, preferred shareholders, and other debt holders have been fully compensated. In the stockholders' equity section of a company's balance sheet, common stock is disclosed. A security that symbolizes ownership in a firm is called common stock. After creditors, bondholders, and preferred stockholders have been paid, whatever assets are left over after a liquidation go to common stockholders. In the market, various kinds of equities are traded.
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