13 08 Issuing Stock Work Place Products Inc., a wholesaler of office products, w

Question

13 08 Issuing Stock

Work Place Products Inc., a wholesaler of office products, was organized on July 1 of the current year, with an authorization of 100,000 shares of 1% preferred stock, $50 par and 400,000 shares of $15 par common stock. The following selected transactions were completed during the first year of operations:

Journalize the transactions.

July. 1. Issued 75,000 shares of common stock at par for cash.

July. 1 Issued 550 shares of common stock at par to an attorney in payment of legal fees for organizing the corporation.

Aug. 7. Issued 23,000 shares of common stock in exchange for land, buildings, and equipment with fair market prices of $63,000, $343,000, and $77,000, respectively.

For a compound transaction, if an amount box does not require an entry, leave it blank.

Sept. 20. Issued 20,000 shares of preferred stock at $58 for cash.

For a compound transaction, if an amount box does not require an entry, leave it blank.

Explanation / Answer

Date Account titles & explanations debit Credit 1-Jul Cash 1125000 common stock (75000*15) 1125000 1-Jul legal expense 8250 common stock (550*15) 8,250 7-Aug land 63,000 buildings 343,000 Equipment 77,000 common stock(23000*15) 345000 Common stock paid in excess of par 138,000 20-Sep cash (20,000*58) 1160000 preferred stock (20,000*50) 1000000 paid in capital in excess of par-PF 160000

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