Question

Issuing Stock

Professional Products Inc., a wholesaler of office products, was organized on February 5 of the current year, with an authorization of 75,000 shares of preferred 4% stock, $60 par and 700,000 shares of $25 par common stock. The following selected transactions were completed during the first year of operations:

Journalize the transactions.

Feb. 5. Issued 95,000 shares of common stock at par for cash.

Feb. 5.

Feb. 5. Issued 500 shares of common stock at par to an attorney in payment of legal fees for organizing the corporation.

Feb. 5.

Apr. 9. Issued 19,500 shares of common stock in exchange for land, buildings, and equipment with fair market prices of $91,000, $498,000, and $113,000, respectively.

If an amount box does not require an entry, leave it blank.

Apr. 9.

June 14. Issued 35,000 shares of preferred stock at $73 for cash.

If an amount box does not require an entry, leave it blank.

June 14.

Answer 1

Date	General Journal	Debit	Credit
Feb. 5	Cash (95000 x $25)	2375000
	Common stock		2375000
Feb. 5	Organization costs (500 x $25)	12500
	Common stock		12500
Apr. 9	Land	91000
	Buildings	498000
	Equipment	113000
	Common stock (19500 x $25)		487500
	Paid-in capital in excess of par-common		214500
Jun. 14	Cash (35000 x $73)	2555000
	Preferred stock (35000 x $60)		2100000
	Paid-in capital in excess of par-preferred		455000