Tillman performed legal services for J. Laney. Due to a cash shortage, an agreement was reached whereby J. Laney. would pay H. Tillman a legal fee of approximately $4,000 by issuing 1,000 shares of its common stock (par $1). The stock trades on a daily basis and the market price of the stock on the day the debt was settled is $4.50 per share. Given this information, the journal entry for J. Laney. to record this transaction is:

a. Legal Expense 4,500

Common Stock 4,500

b. Legal Expense 4,000

Common Stock 4,000

c. Legal Expense 4,000

Common Stock 1,000

Paid-in Capital in Excess of Par Common 3,000

d. Legal Expense 4,500

Common Stock 1,000

Paid-in Capital in Excess of Par Common 3,500

Select one:

a. C

b. D

c. A

d. B