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

2. 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

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

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

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

6. 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?

7. For additional news stories to use in the accounting classroom, see the Accounting in the Headlines blog at Questions or comments? Contact Dr. Wendy Tietz at