Question

Question content area a corporation was organized on january 1 of the current year, with an authorization of 20,000 shares of 4%, $12 par preferred stock, and 100,000 shares of $3 par common stock. The following selected transactions were completed during the first year of operations: date transaction january 3 issued 15,000 shares of common stock at $23 per share for cash. January 31 issued 200 shares of common stock to an attorney in payment of legal fees for organizing the corporation. The value of the stock at the time of payment was $25 per share. February 24 issued 20,000 shares of common stock in exchange for land, buildings, and equipment with fair market prices of $65,000, $120,000, and $45,000 respectively. March 15 issued 2,000 shares of preferred stock at $56 for cash. Journalize the transactions. If an amount box does not require an entry, leave it blank

Answer 1

The journal will be:

Transaction 1:

Date: January 3

Debit Credit

Cash 15,000*$23 = ${data-answer}lt;<1500023=345000>>345,000

Common Stock 15,000$3 = ${data-answer}lt;<15000*3=45000>>45,000

Transaction 2:

Date: January 31

Debit Credit

Legal Fees ${data-answer}lt;<20025=5000>>5,000

Common Stock 200$3 = ${data-answer}lt;<200*3=600>>600

Transaction 3:

Date: February 24

Debit Credit

Land $65,000

Buildings $120,000

Equipment $45,000

Common Stock 20,000*$3 = ${data-answer}lt;<20000*3=60000>>60,000

Transaction 4:

Date: March 15

Debit Credit

Cash 2,000*$56 = ${data-answer}lt;<200056=112000>>112,000

Preferred Stock 2,000$12 = ${data-answer}lt;<2000*12=24000>>24,000

A journal entry in business is a record of a financial transaction that is made in a company's accounting system. Journal entries are used to record the debits and credits that are associated with a particular transaction. In a double-entry accounting system, every journal entry must have at least two entries: a debit to one account and a credit to another account.

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