Journalize the entries to record the transactions Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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**Selected Stock Transactions**

**Instructions:**

1. The organization of the corporation issued 42,500 shares of stock at par to Michele Kirby for cash. (Record as two separate transactions.)

2. On the 8th, the corporation purchased land and a building from Gretchen Northway in exchange for stock issued at par. The building is mortgaged for $177,100 for 20 years at 6%, and there is accrued interest of $4,700 on the mortgage at the time of the purchase. It is agreed that the land is to be priced at $57,800 and the building at $228,500, 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.

**Required:**

- Journalize the entries to record the transactions. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.
Transcribed Image Text:**Selected Stock Transactions** **Instructions:** 1. The organization of the corporation issued 42,500 shares of stock at par to Michele Kirby for cash. (Record as two separate transactions.) 2. On the 8th, the corporation purchased land and a building from Gretchen Northway in exchange for stock issued at par. The building is mortgaged for $177,100 for 20 years at 6%, and there is accrued interest of $4,700 on the mortgage at the time of the purchase. It is agreed that the land is to be priced at $57,800 and the building at $228,500, 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. **Required:** - Journalize the entries to record the transactions. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.
**Instructions**

Alpha Sounds Corp., an electric guitar retailer, was organized by Michele Kirby, Paul Glenn, and Gretchen Northway. The charter authorized 1,100,000 shares of common stock with a par of $1.

The following transactions affecting stockholders' equity were completed during the first year of operations:

Jan. 2  
- Issued 102,000 shares of stock at par to Paul Glenn for cash.

Jan. 5  
- Issued 3,600 shares of stock at par to Michele Kirby for promotional services provided in connection with the organization of the corporation and issued 42,500 shares of stock at par to Michele Kirby for cash. (record as two separate transactions.)

Jan. 8  
- Purchased land and a building from Gretchen Northway in exchange for stock issued at par. The land and building are mortgaged for $177,100 for 20 years at 6%, and there is accrued interest of $4,700 on the mortgage note at the time of the purchase. It is agreed that the land is to be priced at $57,800 and the building at $329,500 and that Gretchen Northway’s equity will be exchanged for stock at par.
Transcribed Image Text:**Instructions** Alpha Sounds Corp., an electric guitar retailer, was organized by Michele Kirby, Paul Glenn, and Gretchen Northway. The charter authorized 1,100,000 shares of common stock with a par of $1. The following transactions affecting stockholders' equity were completed during the first year of operations: Jan. 2 - Issued 102,000 shares of stock at par to Paul Glenn for cash. Jan. 5 - Issued 3,600 shares of stock at par to Michele Kirby for promotional services provided in connection with the organization of the corporation and issued 42,500 shares of stock at par to Michele Kirby for cash. (record as two separate transactions.) Jan. 8 - Purchased land and a building from Gretchen Northway in exchange for stock issued at par. The land and building are mortgaged for $177,100 for 20 years at 6%, and there is accrued interest of $4,700 on the mortgage note at the time of the purchase. It is agreed that the land is to be priced at $57,800 and the building at $329,500 and that Gretchen Northway’s equity will be exchanged for stock at par.
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