Percy Corporation was formed on January 1. The corporate charter authorized 100,000 shares of $10 par value common stock. During the first month of operation, the corporation issued 270 shares to its attorneys in payment of a $4,700 charge for drawing up the articles of incorporation. The entry to record this transaction would include:

paid in capital in excess of par value = $2000

and There will be a debit to Organisation expenses for $4,700

Explanation:

given data

charter authorized = 100,000 shares

common stock = $10 par value

issued = 270 shares

payment = $4,700

solution

we know here that

Paid up value of the stock = $10 per share

and here shares issue to the attorney satisfying the organisation expenses is 270 shares

so common stock = 270 shares * $10

common stock = $2700

so paid in capital in excess of par value = $2000

and There will be a debit to Organisation expenses for $4,700