X Company needs to raise $10 million and is considering two options: issue $10 million in common stock January 1, 2021 or $10 million in bonds at an interest rate of 5% on January 1, 2015. Income before Interest and Taxes under either scenario is $2,000,000. The tax rate is 15%. On December 31^st, 2021, the difference in Net Income between the two options will be:

1. $150,000.
2. $500,000.
3. $75,000.
4. $425,000

X Company issued 600 shares of no-par common stock for $10,000. Which of the following journal entries would be made?

1. Cash 10,200

Common Stock 10,200

2. Cash 10,000

Common Stock 10,000

3. Cash 10,000

Common Stock No-Par Value 6,000

Paid-in Capital in Excess of Stated Value 4,000

4. Common Stock No-Par Value 10,200

Cash 10,200