Question

Apex Co. was organized on January 1, 2015. It is authorized to issue 60,000 shares of 6%, $100 par value preference shares, and 600,000 shares of ordinary shares with a par value of $1 per share. The following share transactions were completed during the first year. Date Transaction January, 10 Issued 70,000 ordinary shares for cash at $6 per share. March, 1 Issued 10,000 preference shares for cash at $140 per share. April, 1 Issued 40,000 ordinary shares for equipment. The asking price of the equipment was $100,000: the fair value of the equipment was $80,000. May 1, Issued 90,000 ordinary shares for cash at $7 per share August, 1 Issued 30,000 ordinary shares to lawyers in payment of their fees of $70,000 for services in helping the company to organize. Instructions: Prepare the journal entries to record the above transactions.

Answer 1

Date	Particular	$ Dr	$ Cr
01/10/2015	Cash/Bank A/c Dr	420,000
	To Oridinary share Capital		70,000
	To Security Premium Account		350,000
	(Being oridinary shares issued with premium of $5)
03/01/2015	Cash/Bank A/c Dr	1,400,000
	To 6 % preference share capital		1,000,000
	To Security premium Account		400,000
	(Being Preference shares issued on premium)
04/01/2015	equipment A/c Dr	100,000
	To Oridinary share capital Account		40,000
	to Security premium Account		60,000
	(being 40,000 orinary shares were issued against equipment costng $100,000)
05/01/2015	Cash/ Bank Dr	630,000
	To oridinary share capital account		90,000
	To Security premium A/c		540,000
	(being 90,000 oridinary shares were issued on premium of $6)
08/01/2015	Lawyer consultancy Fees A/C Dr	70,000
	To ordinary share capital		40,000
	To Security premium A/c		30,000
	(being 40,000 ordinary shares were issued for the lawyer fees for service in helping organizing company)