Question

Alpha Sounds Corp., an electric guitar retailer, was organized by Michele Kirby, Paul Glenn, and Gretchen Northway. The charter authorized 1,200,000 shares of common stock with a par of $1.

The following transactions affecting stockholders’ equity were completed during the first year of operations:

Jan.	2	Issued 90,000 shares of stock at par to Paul Glenn for cash.
	5	Issued 2,800 shares of stock at par to Michele Kirby for promotional services provided in connection with the organization of the corporation and issued 48,800 shares of stock at par to Michele Kirby for cash. (record as two separate transactions.)
	8	Purchased land and a building from Gretchen Northway in exchange for stock issued at par. The building is mortgaged for $185,700 for 20 years at 6%, and there is accrued interest of $4,900 on the mortgage note at the time of the purchase. It is agreed that the land is to be priced at $59,100 and the building at $224,700 and that Gretchen Northway’s equity will be exchanged for stock at par. The corporation agreed to assume responsibility for paying the mortgage note and the accrued interest.

Journalize the entries to record the transactions. Refer to the Chart of Accounts for exact wording of account titles.

Answer 1

Date	Account Tittle	Debit	Credit
02-Jan	Cash	$90,000
	Common Stock		$90,000
	TO Record the issue of Common Stock
05-Jan	Promotion Expense	$2,800
	Common Stock		$2,800
	To Record the issue of 2800 Share in lieu of Promotional Serviced
05-Jan	Cash	$48,800
	Common Stock		$48,800
	To Record the issue of 48800 share
08-Jan	Land	$59,100
	Building	$2,24,700
	Mortgage Notes Payable		$1,85,700
	Interest Accrued		$4,900
	Common Stock		$93,200
	To Record the issue of Common Stock with Exchange of Asset and Liabilities