a corporation issued 300 shares of its $5 par value common stock in payment of a $3,800 charge from its…

a corporation issued 300 shares of its $5 par value common stock in payment of a $3,800 charge from its accountant for assistance in filing its charter with the state. the entry to record this transaction will include: multiple choice a $2,300 credit to paid - in capital in excess of par value, common stock. a $3,800 credit to cash. a $3,800 debit to common stock.

a corporation issued 300 shares of its $5 par value common stock in payment of a $3,800 charge from its accountant for assistance in filing its charter with the state. the entry to record this transaction will include: multiple choice a $2,300 credit to paid - in capital in excess of par value, common stock. a $3,800 credit to cash. a $3,800 debit to common stock.

Answer

Explanation:

Step1: Calculate par - value of issued shares

The par - value of each share is $5 and 300 shares are issued. So the par - value of the issued shares is $5\times300 = 1500$.

Step2: Calculate paid - in capital in excess of par

The corporation is paying a $3800 charge with the stock. The par - value of the stock issued is $1500. The paid - in capital in excess of par is $3800−1500 = 2300$. This amount will be credited to Paid - in Capital in Excess of Par Value, Common Stock.

Step3: Analyze other options

There is no cash involved in this transaction, so the credit to Cash option is incorrect. Also, Common Stock is credited for its par - value and not debited.

Answer:

A. A $2300 credit to Paid - in Capital in Excess of Par Value, Common Stock