Ask Question
BusinessBusiness
31 December, 10:43

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 $15,000 by issuing 8,000 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 best journal entry for E. Corp. to record for this transaction isa. Legal Expense 14,400Common Stock 14,400b. Legal Expense 15,000Common Stock 15,000c. Legal Expense 15,000Common Stock 8,000Paid-in Capital in Excess of Par - Common 7,000d. Legal Expense 14,400Common Stock 8,000Paid-in Capital in Excess of Par - Common 6,400

+4
Answers (1)
  1. 31 December, 12:55
    0
    legal fees 15,000 debit

    common stock 8,000 credit

    paid-in in excess of par value 7,000 credit

    Explanation:

    the legal fee expense is for 15,000 so we will recognize the expense for that amount.

    the stock have a face value of $1 but, the laywer agree to recieve up to 8,000 which means thre is an additoonal paid-in for 7,000 which is the deifference between the expense amount and the shares face value.

    That will be recorded in the journal entry.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “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 ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers
You Might be Interested in
Small lean mean agencies which operate on low overheads and do quality work by hiring experts on job basis are called - Options Hot shops Advertising shops Cold shops None of the above
Answers (1)
The main function of the Federal Reserve System is to a. clear checks from member banks. b. serve as the fiscal agent for the federal government. c. control the money supply. d. set reserve requirements of banks.
Answers (1)
Pharoah Company reported a net income of $184,850 for 2022. Pharoah Company also reported depreciation expense of $33,700 and a loss of $4,690 on the disposal of plant assets.
Answers (1)
What is the Best way to conduct a survey?
Answers (2)
Tastee Yogurt Shop wants to survey its customers about their recent experiences. Tastee has a database with all 100,000 customers who have been to the shop.
Answers (1)
New Questions in Business
Which category (or type) of consumer products are: (1) relatively expensive, (2) infrequently purchased, and (3) buyers are willing to expend considerable effort in planning and making purchases? Examples: a house, car, furniture, or computer system
Answers (1)
Your enterprising uncle opens a sandwich shop that employs 6 people. The employees are paid $12 per hour, and a sandwich sells for $4.
Answers (1)
The product of 3 and X increased by 5
Answers (1)
A small business owner is skeptical about online transactions. They are worried that information may be stolen in transmission or that the party on the other end may be a bogus one.
Answers (1)
Provide realistic examples of each of the risk response strategies for both negative and positive risks
Answers (1)
Home » Business » 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 $15,000 by issuing 8,000 shares of its common stock (par $1).
Sign Up Forgot Password?