Woods, Inc B) C) D)

question 54

Multiple Choice

Woods, Inc. issues common stock in exchange for legal services received. The common stock has a fair value of $9,000 and a par value of $600. What is the journal entry required to record this transaction?

• A) \[\begin{array} { | l | r | r | }
• \hline \text { Cash } & 9,000 & \\
• \hline \text { Common Stock } & & 600 \\
• \hline \text { Addl. Paid-in Capital in Excess of Par-Common } & & 8,400 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | l | r | r | }
• \hline \text { Legal Fees Expense } & 9,000 & \\
• \hline \text { Common Stock } & & 600 \\
• \hline \text { Addl. Paid-in Capital in Excess of Par-Common } & & 8,400 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | l | r | r | }
• \hline \text { Cash } & 9,000 & \\
• \hline \text { Common Stock } & & 8,400 \\
• \hline \text { Addl. Paid-in Capital in Excess of Par-Common } & & 600 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | l | r | r | }
• \hline \text { Legal Fees Expense } & 9,000 & \\
• \hline \text { Common Stock } & & 8,400 \\
• \hline \text { Addl. Paid-in Capital in Excess of Par-Common } & & 600 \\
• \hline
• \end{array}\]

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Definitions:

Money Demand Curve

A graph showing the relationship between the quantity of money people want to hold and the interest rate.

Downward Sloping

Describes a curve or line that moves from an upper left to a lower right direction, typically used in the context of supply and demand curves.

Value of Money

The purchasing power of money, which can be influenced by factors like inflation and interest rates.

Money Demand

The total amount of money that households and businesses wish to hold in the form of cash or deposits, at a given time.