Question: Fontenot Corporation was organized in 2009 and began operations at the beginning of 2010. The company is involved in interior design cunsulting services. The following costs were incurred prior to the start of operations.
| Attorney's fees in connection with organization of the company |
|
$17,000 |
| Purchase of drafting and design equipment |
|
|
|
10,000 |
| Costs of meetings of incorporators to discuss organizational activities |
|
7,000 |
| State filing fees to incorporate |
|
|
|
|
1,000 |
|
|
|
|
|
|
|
|
$35,000 |
Instructions:
Q1. Compute the total amount of organization costs incurred by Fontenot.
Q2. Prepare the journal entry to record organization costs for 2010.