Question

Issuing Stock

Work Place Products Inc., a wholesaler of office products, was organized on July 1 of the current year, with an authorization of 75,000 shares of 1% preferred stock, $75 par and 500,000 shares of $20 par common stock. The following selected transactions were completed during the first year of operations:

Journalize the transactions.

cash/common stock/organizational expenses/paid-in capital in excess of par-common stock/preferred stock/retained earnings/land/paid-in capital in excess of par preferred stock/equipment/

July. 1. Issued 120,000 shares of common stock at par for cash.

July. 1

July. 1 Issued 350 shares of common stock at par to an attorney in payment of legal fees for organizing the corporation.

July. 1

Aug. 7. Issued 24,000 shares of common stock in exchange for land, buildings, and equipment with fair market prices of $87,000, $477,000, and $108,000, respectively.

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

Aug. 7

Sept. 20. Issued 25,000 shares of preferred stock at $86 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	Debit $	Credit $
July .1	Cash ( 120,000 x 20 )	2,400,000
	Common Stock		2,400,000
July.1	Organizational Expenses	7,000
	Common Stock ( 350 x 20 )		7,000
Aug.7	Land	87,000
	Building	477,000
	Equipment	108,000
	Common Stock ( 24,000 x 20 )		480,000
	Paid-in capital in excess of par-common stock		192,000
Sept.20	Cash ( 25,000 x 86 )	2,150,000
	Preferred Stock ( 25,000 x 75 )		1,875,000
	Paid-in capital in excess of par preferred stock		275,000