Ralston Company Is Authorized to Issue 10,000 Shares of 8 $\begin{array}{ll}\text { Legal Expense }&9,000 \\\text { Common Stock }& & 9,000 \\\end{array}$

question 62

Short Answer

Ralston Company is authorized to issue 10,000 shares of 8%, $100 par value preferred stock and 500,000 shares of no-par common stock with a stated value of $1 per share. If Ralston issues 9,000 shares of common stock to pay its recent attorney's bill of $37,500 for legal services on a land access dispute, which of the following would be the journal entry for Ralston to record? a.
$\begin{array}{ll}\text { Legal Expense }&9,000 \\\text { Common Stock }& & 9,000 \\\end{array}$
b.
$\begin{array}{lll}\text { Legal Expense } & 37,500 & \\\quad \text { Common Stock } & & 37,500\end{array}$

c.
$\begin{array}{lr}\text { Legal Expense } & 37,500 \\\text { Common Stock } & &9,000 \\\text { Paid-in Capital in Excess of Stated Value - Common } && 28,500\end{array}$ d.
$\begin{array}{lr}\text { Legal Expense } & 37,500 \\\text { Common Stock } && 9,000 \\\text { Paid-in Capital in Excess of Par - Preferred } && 28,500\end{array}$

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Definitions:

Limbic System

A complex system of nerves and networks in the brain, involved with instinct and mood control, and the basic emotional drives.

Umami

One of the five basic tastes, characterized by a savory or meaty flavor, and attributed to the presence of glutamates and nucleotides.

Primary Tastes

The fundamental groups of tastes recognized by human taste perception, including sweet, sour, salty, bitter, and umami.

Sweet

A taste sensation often caused by the presence of sugars, perceived as pleasant and liked by most humans.