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 50,000 shares of 2% preferred stock, $40 par and 250,000 shares of $20 par common stock. The following selected transactions were completed during the first year of operations:

Journalize the transactions.

July. 1. Issued 135,000 shares of common stock at par for cash.

July. 1

July. 1 Issued 600 shares of common stock at par to an attorney in payment of legal fees for organizing the corporation.

July. 1

Aug. 7. Issued 15,500 shares of common stock in exchange for land, buildings, and equipment with fair market prices of $56,000, $308,000, and $70,000, respectively.

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

Aug. 7

Sept. 20. Issued 13,000 shares of preferred stock at $55 for cash.

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

Sept. 20

Answer 1

Journalize the transactions.

July. 1. Issued 135,000 shares of common stock at par for cash.

July. 1	Cash (135000*20)	2700000
	Common Stock		2700000

July. 1 Issued 600 shares of common stock at par to an attorney in payment of legal fees for organizing the corporation.

July. 1	Organization expense (600*20)	12000
	Common Stock		12000

Aug. 7. Issued 15,500 shares of common stock in exchange for land, buildings, and equipment with fair market prices of $56,000, $308,000, and $70,000, respectively.

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

Aug. 7	Land	56000
	Building	308000
	Equipment	70000
	Common Stock (15500*20)		310000
	Paid in capital in excess of par value-Common Stock		124000

Sept. 20. Issued 13,000 shares of preferred stock at $55 for cash.

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

Sept. 20	Cash (13000*55))	715000
	Preferred stock (13000*40)		520000
	Paid in capital in excess of par value-Preferred stock		195000