Eastern Corporation is formed by John and Joy with an initial capitalization of $500,000. Two alternative capitalization plans are being considered: (1) John and Joy, who are unrelated, each would receive $200,000 of 8% 15-year bonds and $50,000 of Eastern stock, or (2) John and Joy each would receive $250,000 of Eastern stock. John’s business assets that would be transferred to Eastern have significantly appreciated over time, and John does not want to recognize any gain on the transfer of these assets. Organizational costs of $3,000 are expected to be incurred. What tax issues should John and Joy consider with respect to the asset transfer, the organizational expenditures, the capital structure, and other aspects of the corporate formation?