Willow Creek Nursery, with an authorization of 78,000 shares of preferred stock and 190,000 shares of common stock, completed several transactions involving its stock on October 1, the first day of operations. The trial balance at the close of the day follows: Journalize the two entries to record the transactions summarized in the trial balance. Refer to the chart of accounts for the exact wording of the account titles. CNOW journalsdo 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 creditamount is entered.PAGE 1JOURNALACCOUNTING EQUATIONDATEDESCRIPTIONPOST. REF.DEBITCREDITASSETSLIABILITIESEQUITY1234567 Willow Creek NurseryUNADJUSTED TRIAL BALANCEOctober 1, 20--ACCOUNT TITLEDEBITCREDIT1 Cash3,264,000.002 Land896,000.003 Buildings2,784,000.004 Preferred 1% Stock, $80 par3,200,000.005 Paid-In Capital in Excess of Par-Preferred Stock480,000.006 Common Stock, $30 par3,060,000.00Paid-In Capital in Excess of Par-Common Stock204,000.0078 Totals6,944,000.006,944,000.00All shares within each class of stock were sold at the same price. The preferred stock was issued in exchange for the land and buildings.

The journal entries to be made from trial balance are as follows: Explanation Entry 1: On Issue…

Willow Creek Nursery UNADJUSTED TRIAL BALANCE October 1, 20-- ACCOUNT TITLE DEBIT CREDIT 1 Cash 3,264,000.00 2 Land 896,000.00 3 Buildings 2,784,000.00 Preferred 1% Stock, $80 par 3,200,000.00 4 5 Paid-In Capital in Excess of Par-Preferred Stock 480,000.00 6 Common Stock, $30 par 3,060,000.00 7 Paid-In Capital in Excess of Par-Common Stock 204,000.00 Totals 6,944,000.00 6,944,000.00 All shares within each class of stock were sold at the same price. The preferred stock was issued in exchange for the land and buildings.

Willow Creek Nursery UNADJUSTED TRIAL BALANCE October 1, 20-- ACCOUNT TITLE DEBIT CREDIT 1 Cash 3,264,000.00 2 Land 896,000.00 3 Buildings 2,784,000.00 Preferred 1% Stock, $80 par 3,200,000.00 4 5 Paid-In Capital in Excess of Par-Preferred Stock 480,000.00 6 Common Stock, $30 par 3,060,000.00 7 Paid-In Capital in Excess of Par-Common Stock 204,000.00 Totals 6,944,000.00 6,944,000.00 All shares within each class of stock were sold at the same price. The preferred stock was issued in exchange for the land and buildings.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

Section: Chapter Questions

Problem 10MCQ

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