Question

Professional Products Inc., a wholesaler of office products, was organized on February 5 of the current year, with an authorization of 27,000 shares of preferred 2% stock, $100 par and 600,000 shares of $10 par common stock. The following selected transactions were completed during the first year of operations:

Feb.	5	Issued 213,000 shares of common stock at par for cash.
	5	Issued 400 shares of common stock at par to an attorney in payment of legal fees for organizing the corporation.
Apr.	9	Issued 69,400 shares of common stock in exchange for land, buildings, and equipment with fair market prices of $149,100, $505,120 and $164,700 respectively.
June	14	Issued 17,600 shares of preferred stock at $105 for cash.

Journalize the transactions. Refer to the Chart of Accounts for exact wording of account titles.

CHART OF ACCOUNTS
Professional Products Inc.
General Ledger
ASSETS 110 Cash 120 Accounts Receivable 131 Notes Receivable 132 Interest Receivable 141 Inventory 145 Office Supplies 151 Prepaid Insurance 181 Land 191 Buildings 192 Accumulated Depreciation-Buildings 193 Equipment 194 Accumulated Depreciation-Equipment LIABILITIES 210 Accounts Payable 221 Notes Payable 226 Interest Payable 231 Cash Dividends Payable 236 Stock Dividends Distributable 241 Salaries Payable 261 Mortgage Note Payable EQUITY 311 Common Stock 312 Paid-In Capital in Excess of Par-Common Stock 315 Treasury Stock 321 Preferred Stock 322 Paid-In Capital in Excess of Par-Preferred Stock 331 Paid-In Capital from Sale of Treasury Stock 340 Retained Earnings 351 Cash Dividends 352 Stock Dividends 390 Income Summary	REVENUE 410 Sales 610 Interest Revenue

Answer 1

Journal Entries
Sr. No.	Date	Account Title and explanation	Debit	Credit
1	Feb, 05	Cash	$2,13,000
		Common Stock		$2,13,000
2	Feb, 05	Legal Fees	$40,000
		Common Stock		$40,000
3	Apr, 09	Land	$1,49,100
		Building	$5,05,120
		Equipment	$1,64,700
		Common Stock(69,400 Shares X $ 10)		$6,94,000
		Paid-In Capital in Excess of Par-Common Stock		$1,24,920
4	June, 14	Cash (17,600 Shares X $ 105)	$18,48,000
		Preferred Stock		$17,60,000
		Paid-In Capital in Excess of Par-Preferred Stock		$88,000