MULTIPLE CHOICE QUESTION:

1. Alany Inc pays $5,000 cash for the organization of its corporation. What is included in the journal entry to record this transaction?

A) A debit to an expense account.

B) A debit to an asset account.

C) A credit to an equity account.

D) A credit to a liability account.

2. Nathalie Inc. has 100, 000 shares authorized, 2,000 shares issued and 1,800 outstanding. It has decided to declare a 2-for-1 share split when the average cost per share was $10. What is included in the journal entry to record the share split ?

A) A credit to common shares for $40,000. B) A credit to common shares for $20,000. C) No journal entry is recorded.

D) A credit to common shares for $4,000.