Badger Corporation Issued 5,000 Shares of Its $5 Par Value

question 148

Multiple Choice

Badger Corporation issued 5,000 shares of its $5 par value common stock in payment for attorney services billed at $40,000.Badger Corporation's stock has been actively trading at $8 per share.The journal entry for this transaction would include a:

• A)debit to Legal Expense $25,000.
• B)debit to Legal Expense $40,000.
• C)credit to Common Stock $15,000.
• D)credit to Common Stock $40,000.

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Definitions:

Substitute Input

A good or service that can be used in place of another good or service in the production process, often affecting supply and market competition.

Labor Resource Market

The marketplace in which individuals offer their labor to employers in exchange for wages.

Output Effect

The change in total output resulting from an adjustment in productive resources or technology.

Service

An intangible act or use provided by one party to another, often characterized by an exchange of expertise or time.