Sunshine Company issued 4,000 shares of its $5 par value common stock in payment of its attorney's bill of $80,000. The bill was for services performed in helping the company incorporate. Sunshine Company should record this transaction by debiting

a. Legal Expense for $20,000.

b. Legal Expense for $80,000.

c. Organization Expense for $20,000.

d. Organization Expense for $80,000.

Red October Company has 2,000 shares of 6%, $100 par cumulative preferred stock outstanding at December 31, 2016. No dividends have been paid on this stock for 2016 or 2017. Dividends in arrears at December 31, 2017 total

a. $0.

b.$1,200.

c. $12,000.

d. $24,000.