A Corporation Issued 100 Shares of Its $5 Par Value

question 118

Multiple Choice

A corporation issued 100 shares of its $5 par value common stock in payment of a $1,800 charge from its accountant for assistance in filing its charter with the state.The entry to record this transaction will include:

• A)A $1,800 credit to Common Stock.
• B)A $300 debit to Organization Expenses.
• C)A $1,300 credit to Paid-in Capital in Excess of Par Value,Common Stock.
• D)A $1,800 debit to Legal Expenses.
• E)A $1,800 credit to Cash.

---

Definitions:

Leakage

In economics, money or income that exits the economy through various channels without returning directly as spending or investment.

Circular Flow

A model in economics that depicts how money and goods move through the economy in a loop between households and firms.

Injection

In economics, a method of adding funds or capital to an economy by government spending or exports; in medicine, it's the act of administering a liquid substance directly into the body through a needle and syringe.

Circular Flow

an economic model that depicts how money moves through the economy, from households to businesses and back, via the markets for goods and services and for factors of production.