Use the following information to answer the question below. When Langston Corporation was formed on January 1,20x5,the corporate charter provided for 100,000 shares of $10 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 400 shares of stock to its lawyer in full payment of the $10,000 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 16,000 shares of stock at a price of $50 per share.
3)The company issued 14,000 shares of stock in exchange for equipment that had a fair market value of $320,000.

-The entry to record transaction 2 is

Question

Use the following information to answer the question below. When Langston Corporation was formed on January 1,20x5,the corporate charter provided for 100,000 shares of $10 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 400 shares of stock to its lawyer in full payment of the $10,000 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 16,000 shares of stock at a price of $50 per share.
3)The company issued 14,000 shares of stock in exchange for equipment that had a fair market value of $320,000.

-The entry to record transaction 2 is

Quizplus · Accepted Answer

The entry to record the issuance of 16,000 shares of stock at a price of $50 per share would be to debit Cash for $800,000 (16,000 shares x $50 per share) and credit Common Stock for $160,000 (16,000 shares x $10 par value). Choice B matches this entry.

Use the Following Information to Answer the Question Below