Question: R. Wilson Corporation commenced operations in early 2017. The corporation incurred \(60,000 of costs such as fees to underwriters, legal fees, state fees, and promotional expenditures during its formation. Prepare journal entries to record the \)60,000 expenditure and 2017 amortization, if any.

Short Answer

Expert verified

Answer

Debited organization expense by $60,000 and credited cash account by the same amount

Step by step solution

01

Organization Expense

The first cost of forming a corporation is referred to as an organizational cost or charge. Legal and advertising fees to establish the corporation with the state and federal governments are common organizational charges.

02

Journal Entry

Date

Particulars

JF

Debit

Credit

Organization Expense

$60,000

Cash

$60,000

(Being organization expenses paid)

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Over 30 million students worldwide already upgrade their learning with Vaia!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Study anywhere. Anytime. Across all devices.

Sign-up for free