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Homework answers / question archive / Mena Company was established on January 1
Mena Company was established on January 1. The corporate charter authorized 1,000,000 shares of $10 par value common stock. During the first month of opration, the corporation issued 400 shares to its attorneys in payment of a $7.000 charge for drawing up the articles of incorporation. The entry to record this transaction would include: A. A debit to Organization Expenses for $6,000. B. A credit to Paid-in Capital in Excess of Par Value. Common Stock for $4,000. C. A debit to Paid-in Capital in Excess of Par Value, Common Stock for $3,000. D. A credit to Common Stock for $4,000.
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Answer - Option D |
A credit to common stock for $4,000 |
Explanation
|
Particulars |
Debit($) |
Credit($) |
|
Organization expenses |
7000 |
|
|
Paid Up capital(Common stock) |
4000 |
|
|
Paid up capital in excess of par value, Common stock |
3000 |
