Alpha Sounds Corp., an electric guitar retailer, was organized by Michele Kirby,
ID: 2395229 • Letter: A
Question
Alpha Sounds Corp., an electric guitar retailer, was organized by Michele Kirby, Paul Glenn, and Gretchen Northway. The charter authorized 1,500,000 shares of common stock with a par of $1.
Journalize the entries to record the following transactions affecting stockholders’ equity, were completed during the first year of operations. Refer to the Chart of Accounts for exact wording of account titles. Enter the January 5 transaction as two separate journal entries.
Purchased land and a building from Gretchen Northway in exchange for stock issued at par. The building is mortgaged for $178,400 for 20 years at 6%, and there is accrued interest of $5,200 on the mortgage note at the time of the purchase. It is agreed that the land is to be priced at $58,100 and the building at $226,700 and that Gretchen Northway’s equity will be exchanged for stock at par. The corporation agreed to assume responsibility for paying the mortgage note and the accrued interest.
Journalize the entries to record the transactions. Refer to the Chart of Accounts for exact wording of account titles. Enter the January 5 transaction as two separate journal entries.
PAGE 1
JOURNAL
ACCOUNTING EQUATION
1
2
3
4
5
6
7
8
9
10
11
Jan. 2 Issued 84,000 shares of stock at par to Paul Glenn for cash. 5 Issued 3,500 shares of stock at par to Michele Kirby for promotional services provided in connection with the organization of the corporation, and issued 44,300 shares of stock at par to Michele Kirby for cash. 8Purchased land and a building from Gretchen Northway in exchange for stock issued at par. The building is mortgaged for $178,400 for 20 years at 6%, and there is accrued interest of $5,200 on the mortgage note at the time of the purchase. It is agreed that the land is to be priced at $58,100 and the building at $226,700 and that Gretchen Northway’s equity will be exchanged for stock at par. The corporation agreed to assume responsibility for paying the mortgage note and the accrued interest.
Journalize the entries to record the transactions. Refer to the Chart of Accounts for exact wording of account titles. Enter the January 5 transaction as two separate journal entries.
PAGE 1
JOURNAL
ACCOUNTING EQUATION
DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY1
2
3
4
5
6
7
8
9
10
11
Explanation / Answer
DATE DESCRIPTION DEBIT CREDIT ASSETS LIABILITIES EQUITY 2-Jan Cash $84,000 $84,000 0 $84,000 Common stock $84,000 (being issue of common stock) 5-Jan Organization expenses $3,500 44300 $47,800 CAsh 44300 ($3,500) Common stock $47,800 (being issue of common stock for cash and organizational services) 8-Jan 3 Land $58,100 $284,800 183600 $101,200 Building 226700 Mortgage Notes payable 178400 Interest payable 5200 Common stock (bal fog) $101,200 If any doubt please comment
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.