Problem 1:The Justice Corporation is authorized to issue 500,000 shares of ordinary share capital witha stated value of P20. The following transactions have taken place in relation to the sharecapital:a. Issued 125,000 shares for cash at stated value.b. Issued 2,500 shares to attorneys for services in securing corporate charter and forpreliminary legal costs of organizing the corporation. The value of the services wasP150,000.c. Issued 2,000 shares to the corporate promoters. Each ordinary share is selling atP25 on this date.d. Issued 10,000 shares in exchange for land valued at P300,000.e. Issued for cash 50,000 shares at P24 per share.Instructions: Prepare the journal entries to record the preceding transactions, includingauthorized capital, using the memorandum entry method.

A Journal entry is a primary entry that records the financial transactions initially. The…

Answered: The Justice Corporation is authorized…

The Justice Corporation is authorized to issue 500,000 shares of ordinary share capital with a stated value of P20. The following transactions have taken place in relation to the share capital:

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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Question

Problem 1:
The Justice Corporation is authorized to issue 500,000 shares of ordinary share capital with
a stated value of P20. The following transactions have taken place in relation to the share
capital:
a. Issued 125,000 shares for cash at stated value.
b. Issued 2,500 shares to attorneys for services in securing corporate charter and for
preliminary legal costs of organizing the corporation. The value of the services was
P150,000.
c. Issued 2,000 shares to the corporate promoters. Each ordinary share is selling at
P25 on this date.
d. Issued 10,000 shares in exchange for land valued at P300,000.
e. Issued for cash 50,000 shares at P24 per share.
Instructions: Prepare the journal entries to record the preceding transactions, including
authorized capital, using the memorandum entry method.

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