Question

Selected Stock Transactions

Alpha Sounds Corp., an electric guitar retailer, was organized by Michele Kirby, Paul Glenn, and Gretchen Northway. The charter authorized 550,000 shares of common stock with a par of $25. The following transactions affecting stockholders’ equity were completed during the first year of operations.

Selected Stock Transactions Alpha Sounds Corp. an electric guitar reader, was organized by Michele by Paul Glenn, and Gretchen Northway. The charter authored 550,000 shares of comment $25. The following transactions affecting stockholders' uty were completed during the best year of operations with prof Journalize the entries to record the transactions a. Issued 10,000 shares of stock at par to Paul Glenn for cash. b. (1) Issued 500 shares of stock at par to Michele Krby for promotional services provided in connection with the orga par to Michele Kirby for cash. o n of the corporation, and (2) sued 18.000 shares of stock at c. Purchased land and a building from Gretchen Northway in exchange for stock issued at par. The building is mortgaged for $35,000 for 20 years at and there are interest of $4,500 on the mortgage note at the time of the purchase. It is agreed that the land is to be priced at $165,000 and the building at $575.000, and that Gretchen Northways guy will be exchanged for stock at pat. The corporation agreed to assume responsity for paying the mortgage note and the accredinterest an amount box does not require an entry, leave it blank

Answer 1

Answer -

	Accounts titles and explanation	Debit	Credit
a.	Cash (10000 shares * $25)	$250000
	Common stock		$250000

	Accounts titles and explanation	Debit	Credit
b.
(1)	Organization expense	$12500
	Common stock (500 shares * $25)		$12500
(2)	Cash (18000 shares * $25)	$450000
	Common stock		$450000

	Accounts titles and explanation	Debit	Credit
c.	Land	$165000
	Building	$575000
	Mortgage notes payable		$385000
	Interest payable		$4500
	Common stock (Bal. for Exchange)		$350500