Question Details

S. Lamar performed legal services for E. Garr




1.	If Keene Company issues 4,500 shares of $5 par value common stock for $80,000, the account
a.	Common Stock will be credited for $22,500.
b.	Paid-in Capital in Excess of Par will be credited for $22,500.
c.	Paid-in Capital in Excess of Par will be credited for $80,000.
d.	Cash will be debited for $57,500.



	2.	Carson Packaging Corporation began business in 2013 by issuing 25,000 shares of $3 par common stock for $8 per share and 10,000 shares of 6%, $10 par preferred stock for par. At year end, the common stock had a market value of $12. On its December 31, 2013 balance sheet, Carson Packaging would report
a.	Common Stock of $300,000.
b.	Common Stock of $75,000.
c.	Common Stock of $200,000.
d.	Paid-In Capital of $75,000.



	3.	Hsu, Inc. issued 7,500 shares of stock at a stated value of $8/share. The total issue of stock sold for $15 per share. The journal entry to record this transaction would include a
a.	debit to Cash for $60,000.
b.	credit to Common Stock for $60,000.
c.	credit to Paid-in Capital in Excess of Par for $112,500.
d.	credit to Common Stock for $112,500.



	4.	S. Lamar performed legal services for E. Garr. Due to a cash shortage, an agreement was reached whereby E. Garr. would pay S. Lamar a legal fee of approximately $8,000 by issuing 2,000 shares of its common stock (par $1). The stock trades on a daily basis and the market price of the stock on the day the debt was settled is $4.50 per share. Given this information, the journal entry for E. Garr. to record this transaction is: 

a.	Legal Expense	9,000
		Common Stock 		9,000

b.	Legal Expense	8,000
		Common Stock		8,000

c.	Legal Expense	8,000
		Common Stock 		2,000
		Paid-in Capital in Excess of Par - Common		6,000

d.	Legal Expense	9,000
		Common Stock		2,000
		Paid-in Capital in Excess of Par - Common		7,000



5.	Jarrett Company issued 600 shares of no-par common stock for $8,800. Which of the following journal entries would be made if the stock has no stated value?

a.	Cash		8,800
		Common Stock		8,800

b.	Cash		8,800
		Common Stock		600
		Paid-in Capital in Excess of Par		8,200

c.	Cash		8,800
		Common Stock		600
		Paid-in Capital in Excess of Stated Value		8,200

d.	Common Stock	8,800
		Cash		8,800





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