A.) On April 1, Falkland issued bonds with a face (par) amount of $4,000,000. However, the amount of cash Falkland received from selling the bonds was $3,970,000. How should Falkland record the sale of the bonds on April 1? [Some choices are blatantly incorrect and would never be correct accounting.]

1.)

	Debit	Credit
Cash	3,970,000
Discount on bonds	30,000
Bonds payable		4,000,000

2.)

	Debit	Credit
Cash	3,970,000
Premium on bonds	30,000
Bonds payable		4,000,000

3.)

	Debit	Credit
Cash	4,000,000
Bonds payable		3,970,000
Discount on bonds		30,000

4.)

	Debit	Credit
Bonds payable	4,000,000
Premium on bonds		30,000
Cash		3,970,000

B.) Parker Inc. is a new company and short on cash. On April 20, Parker distributed 1,000 shares of common stock to an accountant who helped organize the new company by designing the accounting system. [Parker "paid" for the services by issuing stock, in lieu of cash.] The stock has a PAR value of $3 per share, and the accountant's services have a fair value of $11,500. What is the journal entry Parker should record on April 20?

[Some choices are blatantly incorrect and would never be correct accounting.]

1.)

	Debit
20-Apr
Retaied earnings	11,500
Common stock at $3 par		3,000
Additional-paid-in-capital		8,500

2.)

	Debit	Credit
20-Apr
Common stock at $3 par	11,500
Office Expenses		11,500

3.)

	Debit	Credit
20-Apr
Organization expenses	8,500
Common stock at $3 par	3,000
Additional-paid-in-capital		11,500

4.)

	Debit	Credit
20-Apr
Organization expenses	11,500
Common stock at $3 par		3,000
Additional-paid-in-capital		8,500