Issuing Stock Professional Products Inc., a wholesaler of office products, was o

Question

Issuing Stock

Professional Products Inc., a wholesaler of office products, was organized on February 5 of the current year, with an authorization of 75,000 shares of preferred 4% stock, $60 par and 700,000 shares of $25 par common stock. The following selected transactions were completed during the first year of operations:

Journalize the transactions.

Feb. 5. Issued 95,000 shares of common stock at par for cash.

Feb. 5. Issued 500 shares of common stock at par to an attorney in payment of legal fees for organizing the corporation.

Apr. 9. Issued 19,500 shares of common stock in exchange for land, buildings, and equipment with fair market prices of $91,000, $498,000, and $113,000, respectively.

If an amount box does not require an entry, leave it blank.

June 14. Issued 35,000 shares of preferred stock at $73 for cash.

If an amount box does not require an entry, leave it blank.

Explanation / Answer

Date General Journal Debit Credit Feb. 5 Cash (95000 x $25) 2375000 Common stock 2375000 Feb. 5 Organization costs (500 x $25) 12500 Common stock 12500 Apr. 9 Land 91000 Buildings 498000 Equipment 113000 Common stock (19500 x $25) 487500 Paid-in capital in excess of par-common 214500 Jun. 14 Cash (35000 x $73) 2555000 Preferred stock (35000 x $60) 2100000 Paid-in capital in excess of par-preferred 455000

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