Question

. Work Place Products Inc., a wholesaler of office products, was organized on July 1 of the current year, with an authorization of 25,000 shares of preferred 2% stock, $100 par and 500,000 shares of $10 par common stock. The following selected transactions were completed during the first year of operations:

July	1	Issued 220,000 shares of common stock at par for cash.
	1	Issued 700 shares of common stock at par to an attorney in payment of legal fees for organizing the corporation.
Aug.	7.	Issued 68,700 shares of common stock in exchange for land, buildings, and equipment with fair market prices of $153,800, $458,110 and $164,400 respectively.
Sept.	20.	Issued 18,200 shares of preferred stock at $115 for cash.

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

Answer 1

Solution-

JOURNAL ENTRY

Date	Account Titles and Explanations	Debit ($)	Credit ($)
July 1	Cash [220000 * 10]	2200000
	To Common stock		2200000
	(Being, issued common stock )
July 1	Organisation Expense [700 * 10]	7000
	To Common stock		7000
	(Being, issued common stock)
Aug 7	Land	153800
	Buildings	458110
	Equipment	164400
	To Common stock [68700 * 10]		687000
	To Paid in capital in excess of par-common stock		89310
	(Being, issued common stock in exchange for PPE)
Sep 20	Cash [18200*115]	2093000
	To Preferred stock [18200*100]		1820000
	To Paid in capital in excess of par-common stock		273000
	(Being, issued preferred stock)