Question

13 08 Issuing Stock

Work Place Products Inc., a wholesaler of office products, was organized on July 1 of the current year, with an authorization of 100,000 shares of 1% preferred stock, $50 par and 400,000 shares of $15 par common stock. The following selected transactions were completed during the first year of operations:

Journalize the transactions.

July. 1. Issued 75,000 shares of common stock at par for cash.

July. 1

July. 1 Issued 550 shares of common stock at par to an attorney in payment of legal fees for organizing the corporation.

July. 1

Aug. 7. Issued 23,000 shares of common stock in exchange for land, buildings, and equipment with fair market prices of $63,000, $343,000, and $77,000, respectively.

For a compound transaction, if an amount box does not require an entry, leave it blank.

Aug. 7

Sept. 20. Issued 20,000 shares of preferred stock at $58 for cash.

For a compound transaction, if an amount box does not require an entry, leave it blank.

Sept. 20

Answer 1

Date	Account titles & explanations				debit	Credit
1-Jul	Cash				1125000
	common stock		(75000*15)			1125000
1-Jul	legal expense				8250
	common stock (550*15)					8,250
7-Aug	land				63,000
	buildings				343,000
	Equipment				77,000
	common stock(23000*15)					345000
	Common stock paid in excess of par					138,000
20-Sep	cash	(20,000*58)			1160000
	preferred stock (20,000*50)					1000000
	paid in capital in excess of par-PF					160000