Alpha Sounds Corp., an electric guitar retailer, was organized by Michele Kirby, Paul Glenn, and Gretchen Northway. The charter authorized 1,000,000 shares of common stock with a par of $1. The following transactions affecting stockholders' equity were completed during the first year of operations: Journalize the entries to record the transactions. a. Issued 100,000 shares of stock at par to Paul Glenn for cash. If an amount box does not require an entry, leave it blank. b. (1) Issued 3,000 shares of stock at par to Michele Kirby for promotional services provided in connection with the organization of the corporation, and (2) issued 45,000 shares of stock at par to Michele Kirby for cash. If an amount box does not require an entry, leave it blank. (1) (2) E 3 c. Purchased land and a building from Gretchen Northway in exchange for stock issued at par. The building is mortgaged for $180,000 for 20 years at 6%, and there is accrued interest of $5,200 on the mortgage note at the time of the purchase. It is agreed that the land is to be priced at $60,000 and the building at $225,000 and that Gretchen 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. If an amount door not require an entry, leave it blank.
Alpha Sounds Corp., an electric guitar retailer, was organized by Michele Kirby, Paul Glenn, and Gretchen Northway. The charter authorized 1,000,000 shares of common stock with a par of $1. The following transactions affecting stockholders' equity were completed during the first year of operations: Journalize the entries to record the transactions. a. Issued 100,000 shares of stock at par to Paul Glenn for cash. If an amount box does not require an entry, leave it blank. b. (1) Issued 3,000 shares of stock at par to Michele Kirby for promotional services provided in connection with the organization of the corporation, and (2) issued 45,000 shares of stock at par to Michele Kirby for cash. If an amount box does not require an entry, leave it blank. (1) (2) E 3 c. Purchased land and a building from Gretchen Northway in exchange for stock issued at par. The building is mortgaged for $180,000 for 20 years at 6%, and there is accrued interest of $5,200 on the mortgage note at the time of the purchase. It is agreed that the land is to be priced at $60,000 and the building at $225,000 and that Gretchen 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. If an amount door not require an entry, leave it blank.
Financial Accounting
14th Edition
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Carl Warren, Jim Reeve, Jonathan Duchac
Chapter13: Corporations: Organization, Stock Transactions, And Dividends
Section: Chapter Questions
Problem 3PA: The following selected accounts appear in the ledger of EJ Construction Inc. at the beginning of the...
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Transcribed Image Text:Alpha Sounds Corp., an electric guitar retailer, was organized by
Michele Kirby, Paul Glenn, and Gretchen Northway. The charter
authorized 1,000,000 shares of common stock with a par of $1. The
following transactions affecting stockholders' equity were completed
during the first year of operations:
Journalize the entries to record the transactions.
a. Issued 100,000 shares of stock at par to Paul Glenn for cash. If
an amount box does not require an entry, leave it blank.
b. (1) Issued 3,000 shares of stock at par to Michele Kirby for
promotional services provided in connection with the organization
of the corporation, and (2) issued 45,000 shares of stock at par to
Michele Kirby for cash. If an amount box does not require an entry,
leave it blank.
(1)
(2)
00
000
c. Purchased land and a building from Gretchen Northway in
exchange for stock issued at par. The building is mortgaged for
$180,000 for 20 years at 6%, and there is accrued interest of
$5,200 on the mortgage note at the time of the purchase. It is
agreed that the land is to be priced at $60,000 and the building at
$225,000 and that Gretchen 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. If an amount
box does not require an entry, leave it blank.
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