Question

rofessional Products Inc., a wholesaler of office products, was organized on February 5 of the current year, with an authorization of 100,000 shares of preferred 4% stock, $75 par and 500,000 shares of $10 par common stock. The following selected transactions were completed during the first year of operations:

Journalize the transactions.

Feb. 5. Issued 100,000 shares of common stock at par for cash.

Feb. 5.

Feb. 5. Issued 450 shares of common stock at par to an attorney in payment of legal fees for organizing the corporation.

Feb. 5.

Apr. 9. Issued 23,000 shares of common stock in exchange for land, buildings, and equipment with fair market prices of $42,000, $229,000, and $51,000, respectively.

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

Apr. 9.

June 14. Issued 25,000 shares of preferred stock at $87 for cash.

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

June 14.

Answer 1

Journal entry :

Date	account and expalantion	debit	credit
Feb 5	Cash	1000000
	Common Stock		1000000
	(To record issue common stock)
Feb 5	Organisation fees (450*10)	4500
	Common Stock		4500
	(To record common Stock)
Apr 9	Land	42000
	Building	229000
	Equipment	51000
	Common Stock		230000
	Paid in capital in excess of par value-Common Stock		92000
	(To record common Stock)
June 14	Cash (25000*87)	2175000
	Preferred Stock (25000*75)		1875000
	Paid in capital in excess of par value-Preferred Stock		300000
	(To record preferred Stock)