Issuing Stock Professional Products Inc a wholesaler of offi

Issuing Stock Professional Products Inc., a wholesaler of office products, was organized on February 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 completed during the first year of operations: Journalize the transactions. Feb. 5. Issued 600,000 shares of common stock at par for cash. Feb. 5 Feb. 5. Issued 1,500 shares of common stock at par to an attorney in payment of legal fees for organizing the corporation. Feb. 5

Solution

Date Title Debit Credit Feb-05 Cash (600,000*$8) $ 4,800,000 Common stock $ 4,800,000 Feb-05 Incorporation fee/ legal fees (1,500*$8) $        12,000 Common stock $        12,000 Apr-09 Land $     100,000 Building $     310,000 Equipment $        85,000 Common stock (45,000*$8) $     360,000 Additional paid in capital - common stock $     135,000 Jun-14 Cash (30,000*$53) $ 1,590,000 Preference stock (30,000*$40) $ 1,200,000 Additional paid in capital - preferred stock $     390,000