A corporation was formed on January 1. The corporate charter authorized 180,000

Question

A corporation was formed on January 1. The corporate charter authorized 180,000 shares of $10 par value common stock. During the first month of operation, the corporation issued 280 shares to its attorneys in payment of a $3,500 charge for drawing up the articles of incorporation. The entry to record this transaction would include: A debit to Organization Expenses for S4.000. O A debit to Contributed Capital in Excess of Par Value, Common Stock, for $2.800 O A credit to Common Stock for $3,500 O A credit to Contributed Capital in Excess of Par Vakue, Common Stock, for $3.500. O A debit to Organization Expenses for $3,500 MacBook 5 6 7 8

Explanation / Answer

A debit to organisation expenses for $3500 , Drawing up the "Articles of incorporation" is a preliminary expense that is organisation expense

Note:- Entry would be:-

To contributed capital in excess of par value, common stock

[3500 - 2800]

Dr. Cr. organisation expense 3500

To contributed capital in excess of par value, common stock

[3500 - 2800]

700 To common stock [280 * $10] 2800

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