S. Lawyer performed legal services for E. Corp. Due to a cash shortage, an agreement was reached whereby E. Corp. would pay S. Lawyer a legal fee of approximately $10,000 by issuing 5,000 shares of its common stock (par $1) . The stock trades on a daily basis and the market price of the stock on the day the debt was settled is $1.80 per share. Given this information, the journal entry for E. Corp. to record this transaction is:
A) Legal Expense 9,000 Common Stock 9,000
B) Legal Expense 10,000 Common Stock 10,000
C) Legal Expense 10,000 Common Stock 5,000
Paid-in Capital in Excess of Par - Common 5,000
D) Legal Expense 9,000 Common Stock 5,000
Paid-in Capital in Excess of Par - Common 4,000
Correct Answer:
Verified
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