Homework Sourse138 Workplace Products Inc a wholesaler of office products w
13-8 Workplace Products Inc., a wholesaler of office products, was organized on July 1 of the current year, with an authorization of 50,000 shares of preferred 2% stock, $40 par and 750,000 shares of $7 par common stock. The following selected transactions were completed during the first year of operations:
Journalize the transactions.
a. Jul. 1. Issued 400,000 shares of common stock at par for cash.
b. Jul. 1. Issued 1,000 shares of common stock at par to an attorney in payment of legal fees for organizing the corporation.
c. Aug 7. Issued 80,000 shares of common stock in exchange for land, buildings, and equipment with fair market prices of $250,000, $400,000, and $70,000, respectively.
For a compound transaction, if an amount box does not require an entry, leave it blank.
d. Sep 20. Issued 25,000 shares of preferred stock at $44 for cash.
For a compound transaction, if an amount box does not require an entry, leave it blank.
Solution
Journal entry ;
| Date | accounts & explanation | Debit | credit |
| Jul 1 | Cash (400000*7) | 2800000 | |
| Common stock | 2800000 | ||
| (To record issue common stock) | |||
| Jul 1 | Organisation expenses (1000*7) | 7000 | |
| Common stock | 7000 | ||
| (To record issue common stock for organisation exp) | |||
| Aug 7 | Land | 250000 | |
| Building | 400000 | ||
| Equipment | 70000 | ||
| Common stock | 560000 | ||
| Paid in capital in excess of par value- Common stock | 160000 | ||
| (To record exchange common stock with Land, building and equipment) | |||
| Sep 20 | Cash (25000*44) | 1100000 | |
| Preferred stock (25000*40) | 1000000 | ||
| Paid in capital in excess of par value-preferred stock | 100000 | ||
| (To record issue of preferred stock) | |||
