3. 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 230 shares to its attorneys in payment of a $4,300 charge for drawing up the articles of incorporation. The entry to record this transaction would include:

A debit to Organization Expenses for $2,300.

A debit to Organization Expenses for $4,300.

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

A credit to Common Stock for $4,300.

A credit to Paid-in Capital in Excess of Par Value, Common Stock for $4,300.

4. Fontaine and Monroe are forming a partnership. Fontaine invests a building that has a market value of $250,000; the partnership assumes responsibility for a $75,000 note secured by a mortgage on the property. Monroe invests $100,000 in cash and equipment that has a market value of $55,000. For the partnership, the amounts recorded for the building and for Fontaine's Capital account are:

Building $250,000; Fontaine, Capital $175,000.

Building $250,000; Fontaine, Capital $75,000.

Building $175,000; Fontaine, Capital $75,000.

Building $175,000; Fontaine, Capital $175,000.

Building $250,000; Fontaine, Capital $250,000.

5. Wright, Bell, and Edison are partners and share income in a 2:5:3 ratio. The partnership's capital balances are as follows: Wright, $33,000, Bell $27,000 and Edison $40,000. Edison decides to withdraw from the partnership, and the partners agree not to revalue the assets upon Edison's retirement. The journal entry to record Edison's June 1 withdrawal from the partnership if Edison is paid $40,000 for his equity is:

Debit Edison, Capital $40,000; credit Wright, Capital $20,000; credit Bell, Capital $20,000.

Debit Cash $40,000; credit Edison, Capital $40,000.

Debit Wright, Capital $20,000; Debit Bell, Capital $20,000; credit Edison, Capital $40,000.

Debit Wright, Capital $20,000; Debit Bell, Capital $20,000; credit Cash $40,000.

Debit Edison, Capital $40,000; credit Cash $40,000.

6. Wallace and Simpson formed a partnership with Wallace contributing $96,000 and Simpson contributing $76,000. Their partnership agreement calls for the income (loss) division to be based on the ratio of capital investments. The partnership had income of $215,000 for its first year of operation. When the Income Summary is closed, the journal entry to allocate partner income is:

Debit Wallace, Capital $107,500; debit Simpson, Capital $107,500; credit Income Summary $215,000.

Debit Income Summary $215,000; credit Wallace, Capital $120,000; credit Simpson, Capital $95,000.

Debit Cash $215,000; credit Wallace, Capital $120,000; credit Simpson, Capital $95,000.

Debit Income Summary $215,000; credit Wallace, Capital $107,500; credit Simpson, Capital $107,500.

Debit Wallace, Capital $120,000; debit Simpson, Capital $96,000; credit Cash $215,000.