Alpha Sounds Corp, an electric guitar retailer, was organized by Michele Kirby,

Question

Alpha Sounds Corp, an electric guitar retailer, was organized by Michele Kirby, Paul Glenn, and Gretchen Northway. The charter authorized 350,000 shares of common stock with a par of $60. The following transactions affecting stockholders' equity were completed during the first year of operations Journalize the entries to record the transactions a. Issued 13,000 shares of stock at par to Paul Glenn for cash. b. (1) Issued 400 shares of stock at par to Michele Kirby for promotional services provided in connection with the organization of the corporation, and (2) issued 21,000 shares of stock at par to Michele Kirby for cash. issued at par. The building is mortgaged for $469,000 for 20 years at 7% and there is accrued interest of $5,000 C. Purchased land and a building from Gretchen Northway in exchange for stock on the mortgage note at stock at par. The corporation that the land is to be priced at $294,000 and the building at $700,000, and that Gretchen Northway's equity willbe exchanged for agreed to assume responsibility for paying the mortgage note and the accrued interest.

Explanation / Answer

S No. Account titles and explanation Debit Credit a. Cash $          780,000 Common Stock (13,000 shares × $60) $          780,000 b. Organizational Expenses $             24,000 Common Stock (400 shares × $60) $             24,000 Cash $       1,260,000 Common Stock (21,000 shares × $60) $       1,260,000 c. Land $          294,000 Building $          700,000 Interest Payable $               5,000 Mortgage Note Payable $          469,000 Common Stock (8,666.67 shares × $60) $          520,000

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