Question

Alpha Sounds Corp., an electric guitar retailer, was organized by Michele Kirby, Paul Glenn, and Gretchen Northway. The charter authorized 200,000 shares of common stock with a par of $1. The following transactions affecting stockholders' equity were completed during the first year of operations.

Journalize the entries to record the transactions.

If an amount box does not require an entry, leave it blank.

Issued 9,500 shares of stock at par to Paul Glenn for cash.

Cash
Common Stock

(1) Issued 700 shares of stock at par to Michele Kirby for promotional services provided in connection with the organization of the corporation, and (2) issued 19,000 shares of stock at par to Michele Kirby for cash.

(1)	Organizational Expenses
	Common Stock
(2)	Cash
	Common Stock

Purchased land and a building from Gretchen Northway in exchange for stock issued at par. The building is mortgaged for $392,000 for 20 years at 7% and there is accrued interest of $5,000 on the mortgage note at the time of the purchase. The corporation agreed to assume responsibility for paying the mortgage note and accrued interest. It is agreed that the land is to be valued at $236,000 and the building at $585,000, and that Gretchen Northway will be issued stock at par.

Land
Building
Interest Payable
Mortgage Note Payable
Common Stock

Answer 1

Above question is about to journalize the entries for the above events. Refer below image for more detailed solution.

solution : Journal Entries particolars Debit Credit cash To $9500 Al o r $9500 Common Stock Ale [9.500 shares & $1 per share] credit particolars Debit $700 * $700 organizational expenses All Dr To common Stock [700 shares $17 $19000 All or * cash $19000 To common stock tic 119000 Shares 41 Debit credit particolars Land Ale $236000 Building Ak. 458500 To interest payable alt TO Mortgage Note payable Alc To common Stuck All [424000 shares xp $5000 $392000 $424000 to credit Interest Expense. Note an acceptable aHernative would be