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Question(s) / Instruction(s):

Eagle Eye, Inc., a corporation, received an additional investment of $5,000 cash in exchange for shares of capital stock. How does this transaction affect Eagle Eye’s accounts?

a. Increase in stock expense and decrease cash by $5,000 each

b. Increase capital stock and increase cash by $5,000 each

c. Increase capital stock and increase revenue by $5,000 each

d. No effect at this time

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