rofessional Products Inc., a wholesaler of office products, was organized on Feb
ID: 2438961 • Letter: R
Question
rofessional Products Inc., a wholesaler of office products, was organized on February 5 of the current year, with an authorization of 100,000 shares of preferred 4% stock, $75 par and 500,000 shares of $10 par common stock. The following selected transactions were completed during the first year of operations:
Journalize the transactions.
Feb. 5. Issued 100,000 shares of common stock at par for cash.
Feb. 5. Issued 450 shares of common stock at par to an attorney in payment of legal fees for organizing the corporation.
Apr. 9. Issued 23,000 shares of common stock in exchange for land, buildings, and equipment with fair market prices of $42,000, $229,000, and $51,000, respectively.
If an amount box does not require an entry, leave it blank.
June 14. Issued 25,000 shares of preferred stock at $87 for cash.
If an amount box does not require an entry, leave it blank.
Feb. 5.Explanation / Answer
Journal entry :
Date account and expalantion debit credit Feb 5 Cash 1000000 Common Stock 1000000 (To record issue common stock) Feb 5 Organisation fees (450*10) 4500 Common Stock 4500 (To record common Stock) Apr 9 Land 42000 Building 229000 Equipment 51000 Common Stock 230000 Paid in capital in excess of par value-Common Stock 92000 (To record common Stock) June 14 Cash (25000*87) 2175000 Preferred Stock (25000*75) 1875000 Paid in capital in excess of par value-Preferred Stock 300000 (To record preferred Stock)Related Questions
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