A corporation was formed on January 1. The corporate charter authorized 100,000

Question

A corporation was formed on January 1. The corporate charter authorized 100,000 shares of $10 par value common stock. During the first month of operation, the corporation issued 300 shares to its attorneys in payment of a $5,000 charge for drawing up the articles of incorporation. The entry to record this transaction would include:        A debit to Organization Expenses for $3,000
       A debit to Organization Expenses for $5,000
       A credit to Common Stock for $5,000
       A credit to Contributed Capital in Excess of Par Value, Common Stock for $5,000
       A debit to Contributed Capital in Excess of Par Value, Common Stock for $2,000 A corporation was formed on January 1. The corporate charter authorized 100,000 shares of $10 par value common stock. During the first month of operation, the corporation issued 300 shares to its attorneys in payment of a $5,000 charge for drawing up the articles of incorporation. The entry to record this transaction would include:

Explanation / Answer

Organizational Expenses 5000 (debit)

Common stock 3000 (since is the corp gave 300 shares times par value)(credit)

Paid in excess of par 2000 (credit)

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