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The following transactions relate to Academy Towing Service. Assume the transactions for the purchase of the wrecker and any capital improvements occur on January 1 of each year.

**Year 1:**
- Acquired $70,000 cash from the issue of common stock.

Answer :

In Year 1, Academy Towing Service acquired $70,000 in cash from the issuance of common stock. This indicates that the company raised funds by selling shares of its common stock to investors.

Common stock, also known as ordinary shares or equity, represents ownership in a corporation. It is one of the primary types of securities issued by company's to raise capital. Common stockholders have voting rights in corporate decisions and may receive dividends if declared by the company's board of directors. However, they have the lowest priority in receiving payments in case of bankruptcy or liquidation. Common stockholders also have potential to benefit from capital appreciation if the company's stock price increases.

Learn more about common stock here:

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Rewritten by : Jeany

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