Question

On February 20, services valued at $60,000 relating to the organization of a corporation were performed in exchange for 1,000 shares of its $25 par value common stock. Complete the necessary journal entry by selecting the account names from the drop-down menus and entering the dollar amounts in the debit or credit columns.

Answer 1

Step-by-step explanation:

Organization Expenses (debit) $60,000

Common Stock, $25 par value (credit) $25,000 (1,000 shares × $25)

Paid in capital in excess of par value (credit) $35,000

Answer 2

Step-by-step explanation:

The journal entry is shown below:

On February 20

Organization expense A/c Dr $60,000

To Common Stock A/c $25,000 (1,000 shares × $25)

To Paid in capital in excess of par-Common Stock $35,000

(Being the organization expense is recorded and remaining balance is credited to the Paid in capital in excess of par-Common Stock)