Question

Sheffield Corporation commenced operations in early 2020. The corporation incurred $56,000 of costs such as fees to underwriters, legal fees, state fees, and promotional expenditures during its formation.

Prepare journal entries to record the $56,000 expenditure and 2020 amortization, if any. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)

Account Titles and Explanation	Debit	Credit
(To record organization expense)
(To record amortization expense)

Answer 1

Sheffield Corporation commenced operations in early 2020. The corporation incurred $56,000 of costs such as fees to underwriters, legal fees, state fees, and promotional expenditures during its formation

The journal entry would be:

Organization Expense. ................................................................. $56,000

Cash. ........................................................................................ $56,000

But for the total amount the entry is as follows:

Underwriter fees, leegal fee and promotional expenditure Debtor $56,000

To cash account $56,000

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