Question

Professional products inc., a wholesaler of office products waas organized on Feb.5 of the current year, with an authorization of 50,000 shares of preferred 2% stock, $40 par and 1,000,000 shares of $8 par common stock. The following selected transactions were complleted during the first year of operations: Feb 5 issued 600,000 shares of common stock at par for cash Feb 5 issued 1,500 shares of common stock at par to an attorney in payment of legal fees for organizing the corporation. Apr 9 issued 45,000 shares of common stock in exchange for land, buildings, and equipment with fair market prices of $100,000, $310,000, and 85,000 respectively. June 14 issued 30,000 shares of preferred stock at $53 for cash.

Answer 1

JOURNAL ENTRIES
DATE	ACCOUNTS TITLE AND EXPLANATIONS				DEBIT $	CREDIT $
5-Feb	Cash Account Dr.				4,800,000
	Common Stock capital					4,800,000
5-Feb	Organisation expense Dr.				12000
	Common Stock Capital					12000
9-Apr	Land Dr.				100,000
	Building Dr.				310,000
	Equipment Dr.				85,000
	Common Stock capital					495000
14-Jun	Cash Account Dr.				1,590,000
	2% prefered Stock capital					1,200,000
	Additional Paid in capital					390,000