Fontenot Corporation was organized in 2011 and began operations at the beginning of 2012. The company is involved in interior design consulting 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
(a) Compute the total amount of organization costs incurred by Fontenot.
(b) Prepare the journal entry to record organization costs for 2012.