The sale of common stock below par

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

Common Stock

A type of equity security that represents ownership in a corporation, giving holders a share in the company's profits and voting rights.

Par Value

A nominal value assigned to a share of stock or a bond by the issuing company, often used in accounting.

Liability Recorded

The process of documenting a company's obligations or debts in its financial records.