Griffin Service Company, Incorporated, was organized by Bennett Griffin and five other investors (that is, six in total). The following activities occurred during the year: Received $75,000 cash from the six investors; each investor was issued 8,900 shares of common stock with a par value of $0.10 per share. Signed a five-year lease for $157,500 for the right to use a building each year. Purchased equipment for use in the business at a cost of $23,000; one-fourth was paid in cash and the company signed a note for the balance (due in six months). Signed an agreement with a cleaning service to pay $170 per week for cleaning the corporate offices next year. Received an additional contribution from investors who provided $3,500 in cash and land valued at $20,000 in exchange for 1,500 shares of stock in the company. Lent $3,000 to one of the investors, who signed a note due in six months. Bennett Griffin borrowed $7,500 for personal use from a local bank, signing a one-year note. Required: 1. For each of the preceding transactions, record the effects of the transaction in the appropriate T-accounts.

Griffin Service Company, Incorporated, was organized by Bennett Griffin and five other investors (that is, six in total). The following activities occurred during the year: Received $75,000 cash from the six investors; each investor was issued 8,900 shares of common stock with a par value of $0.10 per share. Signed a five-year lease for $157,500 for the right to use a building each year. Purchased equipment for use in the business at a cost of $23,000; one-fourth was paid in cash and the company signed a note for the balance (due in six months). Signed an agreement with a cleaning service to pay $170 per week for cleaning the corporate offices next year. Received an additional contribution from investors who provided $3,500 in cash and land valued at $20,000 in exchange for 1,500 shares of stock in the company. Lent $3,000 to one of the investors, who signed a note due in six months. Bennett Griffin borrowed $7,500 for personal use from a local bank, signing a one-year note. Required: 1. For each of the preceding transactions, record the effects of the transaction in the appropriate T-accounts.

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter13: Choice Of Business Entity—general Tax And Nontax Factors/formation

Section: Chapter Questions

Problem 56P

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1. For each of the preceding transactions, record the effects of the transaction in the appropriate T-accounts.

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