A corporation Issued 250 shares of Its $5 par value common stock in payment of a

Question

A corporation Issued 250 shares of Its $5 par value common stock in payment of a $3,300 charge from its accountant for assistance in fillng its charter with the state. The entry to record this transaction will Include: accountant for assistance in fiing ts charter with the state. The entry to record this transaction will Include: O A $3,300 credit to Common Stock. O A $1.250 debit to Organization Expenses. O A $2.050 credit to Paid-in Capital in Excess of Par Value, Common Stock. O A $3,300 debit to Legal Expenses O A $3,300 credit to Cash.

Explanation / Answer

1) A $2,050 credit to paid-up capital in excess of par value, common stock.

2) Debit Land $84,000; credit common stock $57,000; credit paid-up capital in excess of par value, common stock $27,000

3) $12,825 because dividend is paid only on outstanding shares.

4) Debit Retained earnings $8,600; Credit Common Dividend Payble $8,600.

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