Can you please help me with this accounting question ?

[nissim42]

A 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 300 shares to its attorneys in payment of a $5,000 charge for drawing up the articles of incorporation. The entry to record this transaction would include:
Question 5 options:

A debit to Organization Expenses for $3,000

A debit to Organization Expenses for $5,000

A credit to Common Stock for $5,000

A credit to Contributed Capital in Excess of Par Value, Common Stock for $5,000

A debit to Contributed Capital in Excess of Par Value, Common Stock for $2,000

[adusa37]

The answer is a debit to organization expenses for $5,000

A debit to organization expense of $3,000 is not enough to fully pay the attorneys

The credit to common stock would be $3,000 (300 shares x $10 par value)

A credit to Contributed Capital in Excess of Par Value, Common Stock for $5,000 is too much

A debit to Contributed Capital in Excess of Par Value, Common Stock for $2,000 is incorrect. The account would be CREDITED, not DEBITED.