How will Brooklinen, the luxury bedsheets startup, account for its $10 million Series A stock issuance? Original blog posting (May 9, 2017)

Brooklinen Startup that makes affordable luxury bedsheets Sold online direct-to-customer Started in 2014 initially through Kickstarter campaign Grown 10 times each year, with $25 million in revenue in 2016 March 2017 obtained outside funding through its $10 million Series A round Series A is usually preferred stock issued to venture capital investors, often convertible into common stock at a later date

Question 1 Ignore any underwriting fees. What journal entry would Brooklinen make on the date of its $10 million stock issuance?

Question 2 How are assets, liabilities, and equity impacted by the stock issuance?

Question 3 Why might Brooklinen choose to issue stock instead of obtaining a loan?

Question Recap Ignore any underwriting fees. What journal entry would Brooklinen make on the date of its $10 million stock issuance? How are assets, liabilities, and equity impacted by the stock issuance? Why might Brooklinen choose to issue stock instead of obtaining a loan?

For additional news stories to use in the accounting classroom, see the Accounting in the Headlines blog at http://accountingintheheadlines.com/ Questions or comments? Contact Dr. Wendy Tietz at wtietz@kent.edu