Simon Company Issued 4,000 Ordinary Shares with a $5 Par

question 46

Multiple Choice

Simon Company issued 4,000 ordinary shares with a $5 par value in payment of its attorney's bill of $35,000.The bill was for services performed in helping the company incorporate.Simon should record this transaction by debiting

• A)Legal Expense for $20,000.
• B)Legal Expense for $35,000.
• C)Organization Expense for $20,000.
• D)Organization Expense for $35,000.

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Definitions:

Net Losses

The amount by which expenses exceed revenues, indicating that the business spent more than it earned in a specific period.

Partnership

A formally recognized business venture in which a group of individuals share in the leadership and the financial benefits.

Business Organization

A structured entity set up by individuals or shareholders to engage in business activities, usually for profit.

Death Of A Partner

An event in a partnership business that triggers the need to re-evaluate and possibly restructure the business agreement due to the passing away of one of the partners.