Use the Following Information to Answer the Question Below $\begin{array}{llr} \text { Cash} &200,000\\ \text { Common Stock} &&200,000\\\end{array}$

question 21

Multiple Choice

Use the following information to answer the question below. When Calvert Corporation was formed on January 1,2010,the corporate charter provided for 50,000 shares of $20 par value common stock.The following transactions were among those engaged in by the corporation during its first month of operation:
1) The corporation issued 200 shares of stock to its lawyer in full payment of the $5,000 bill for assisting the company in drawing up its articles of incorporation and filing the proper papers with the state agency.
2) The company issued 8,000 shares of stock at a price of $25 per share.
3) The company issued 7,000 shares of stock in exchange for equipment that had a fair market value of $160,000.
The entry to record transaction 2 would be:

• A)
• \(\begin{array}{llr}
• \text { Cash} &200,000\\
• \text { Common Stock} &&200,000\\
• \end{array}\)
• B)
• \(\begin{array}{l}
• \text { Cash }&200,000\\
• \text { Common Stock } && 160,000 \\
• \text { Additional Paid-in Capital } && 40,000
• \end{array}\)
• C)
• \(\begin{array}{l}
• \text { Cash }&160,000\\
• \text { Additional Paid-in Capital } && 40,000 \\
• \text { Common Stock} && 200,000
• \end{array}\)
• D)
• \(\begin{array}{llr}
• \text { Cash } &160,000\\
• \text {Common Stock } &&160,000\\
• \end{array}\)

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Definitions:

Imports

Imports are goods or services brought into a country from abroad for sale.

Exports

Items or services created in one country and traded to customers in another country.

Net Exports

The value of a country's total exports minus the value of its total imports, representing the net trade balance.

GDP

Gross Domestic Product, the total value of all goods and services produced over a specific time period within a country’s borders.