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 1 would be:
a. Start-up and Organization Costs 4,000
Common Stock 4,000
b. Start-up and Organization Costs 5,000
Common Stock 4,000
Additional Paid-in Capital 1,000
c. Start-up and Organization Costs 4,000
Additional Paid-in Capital 4,000
d. Start-up and Organization Costs 5,000
Common Stock 5,000
B
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