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Alpha Sounds Corp., an electric guitar retailer, was organized by Michele Kirby, Paul Glenn, and Gretchen...

Alpha Sounds Corp., an electric guitar retailer, was organized by Michele Kirby, Paul Glenn, and Gretchen Northway. The charter authorized 450,000 shares of common stock with a par of $35. The following transactions affecting stockholders' equity were completed during the first year of operations.

Journalize the entries to record the transactions.

a. Purchased land and a building from Gretchen Northway in exchange for stock issued at par. The building is mortgaged for $429,000 for 20 years at 7% and there is accrued interest of $8,500 on the mortgage note at the time of the purchase. It is agreed that the land is to be priced at $145,000 and the building at $640,000, and that Northway’s equity will be exchanged for stock at par. The corporation agreed to assume responsibility for paying the mortgage note and the accrued interest.

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Journal Entries Date Account Title and Explaination Debit Credit Post. Ref. a 640,000.00 145,000.00 Buildings Land Interest P

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