1. How would Reverb, the online marketplace for musicians, record its issuance of $25 million of stock?
Original blog posting (February 9, 2016)

2. Reverb Reverb was founded in 2013
Online marketplace for musicians to buy and sell gear
“Ebay for musicians”
Issued $25 million in stock in 2015 to finance its rapid growth

3. Question 1
Why might Reverb choose to use equity funding rather than debt financing?

4. Question 2
Assuming the entire $25 million was issued in one transaction, would journal entry would Reverb make to record the stock issuance in 2015?

5. Question Recap
Why might Reverb choose to use equity funding rather than debt financing?
Assuming the entire $25 million was issued in one transaction, would journal entry would Reverb make to record the stock issuance in 2015?

6. 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