Question

Novak Corporation commenced operations in early 2020. The corporation incurred $53,000 of costs such as fees to underwriters, legal fees, state fees, and promotional expenditures during its formation. Prepare journal entries to record the $53,000 expenditure and 2020 amortization, if any.

Answer 1

S/n Date Account Titles and Explanation Debit Credit

1. 2020 Organization expenses $53,000

Cash $53,000

(Being amount paid to underwriters recorded)

2. No Entry

No Entry

(For amortization)