Woods, Inc. issues common stock in exchange for legal services received. The common stock has a fair value of $3,000 and a par value of $500. What is the journal entry required to record this transaction?
A)
Cash
3,000
Common Stock
500
Addl. Paid-in-Capital in Excess of Par—Common
2,500
B)
Legal Fees Expense
3,000
Common Stock
500
Addl. Paid-in-Capital in Excess of Par—Common
2,500
C)
Cash
3,000
Common Stock
2,500
Addl. Paid-in-Capital in Excess of Par—Common
500
D)
Legal Fees Expense
3,000
Common Stock
2,500
Addl. Paid-in-Capital in Excess of Par—Common
500
Answer: B
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