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

Question

Percy 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 400 shares to its attorneys in payment of a $5,000 charge for drawing up the articles of incorporation. The entry to record this traction would include:

a) A debit to organization Expenses for $4,000.

b) A debit to organization expenses for $5,000.

c) A credit to common stock for $5,000.

d) A credit to Paid-in Capital in Excess of Par Value, Common Stock for $5,000.

e) A debit  to Paid-in Capital in Excess of Par Value, Common Stock for $2,000.

Explanation / Answer

b. a debit to organisation expense for 5000.

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