Question

Professional Products Inc., a wholesaler of office products, was organized on February 5 of the current year, with an authorization of 25,000 shares of preferred 2% stock, $100 par and 500,000 shares of $10 par common stock. The following selected transactions were completed during the first year of operations: Feb. 5 Issue Issued 220,000 shares of common stock at par for cash. 5 Issued 700 shares of common stock at par to an attorney in payment of legal fees for organizing the corporation. Issued 68,700 shares of common stock in exchange for land, buildings, and equipment with fair market prices of $153,800, $458,110 and $164,400 respectively. Apr. 9 June 14 Issued 18,200 shares of preferred stock at $115 for cash. Journalize the transactions. Refer to the Chart of Accounts for exact wording of account titles.

Answer 1

credit date 5-Feb debit $2,200,000 $2,200,000 5-Feb $7,000 $7,000 9-Apr journal description cash common stock organizational expenses common stock land buildings equipment common stock paid in capital in excess of par-common stock cash preferred stock paid in capital in excess of par-preferred stock $153,800 $458,110 $164,400 accounting equation assets Liabilities equity $2,200,000 $2,200,000 -$7,000 $7,000 $153,800 $458,110 $164,400 $687,000 $89,310 $2,093,000 $1,820,000 $273,000 $687,000 $89,310 14-Jun $2,093,000 $1,820,000 $273,000 12