A corporation was organized on January 1 of the current year, with an authorizat

Question

A corporation was organized on January 1 of the current year, with an authorization o f 20.000 shares of $12 par preferred stock, and 100.000 shares o f $3 par common stock. The following selected transactions were completed during the first year o f operations: Issued 15,000 shares of common stock at $23 per share for cash. Issued 200 shares of common stock to an attorney in payment of legal fees for organizing the corporation. The value of the stock at the time of payment was $25 per share. Issued 20,000 shares of common stock in exchange for land, buildings, and equipment with fair market prices of $65,000, $120,000, and $45,000 respectively. Journalize the transactions.

Explanation / Answer

Journal Entries Date Account Title Dr $ Cr $ Jan 3. Cash          345,000 Common Stock                 45,000 Paid In Capital in Excess of Par -Common Stock             300,000 ( Issue of common stock,15000 nos @$30, $3 par) Jan 31. Organization Expenses              5,000 Common Stock                       600 Paid In Capital in Excess of Par -Common Stock                 4,400 ( issue of 200 shares @$25 against legal fees) Feb 24. Land            65,000 Building            120,000 Equipment            45,000 Common Stock                 60,000 Paid In Capital in Excess of Par -Common Stock             170,000

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