Common stock: These are the ordinary shares that a corporation issues to the investors in order to raise funds. In return, the investors receive a share of profit from the profits earned by the corporation in the form of dividend. Preferred stock : The stock that provides a fixed amount of return (dividend) to its stockholder before paying dividends to common stockholders is referred as preferred stock. Par value: It refers to the value of a stock that is stated by the corporation’s charter. It is also known as face value of a stock. Issue of common stock for non cash assets or services: Corporations often issue common stock for the services received from attorneys or consultants as compensation, or for the purchase of non cash assets such as land, buildings, or equipment. To Journalize: The entries to record the transactions.

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Selected stock transactions 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 followingtransactions affecting stockholders' equity were completed during the first year of operations: a. Issued 100,000 shares of stock at par to Paul Glenn for cash.b. Issued 3,000 shares of stock at par to Michele Kirby forpromotional services provided in connection with the organizationof the corporation and issued 45,000 shares of stock at par toMichele Kirby for cash. c. Purchased land and a building from Gretchen Northway inexchange for stock issued at par. The building is mortgaged for$180,000 for 20 years at 6%, and there is accrued interest of $5,200on the mortgage note at the time of the purchase. It is agreed thatthe land is to be priced at $60,000 and the building at $225,000 and that Gretchen North way's equity will be exchanged for stock at par.The…

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Chapter 13, Problem 13.6EX

To determine

Common stock: These are the ordinary shares that a corporation issues to the investors in order to raise funds. In return, the investors receive a share of profit from the profits earned by the corporation in the form of dividend.

Preferred stock: The stock that provides a fixed amount of return (dividend) to its stockholder before paying dividends to common stockholders is referred as preferred stock.

Par value: It refers to the value of a stock that is stated by the corporation’s charter. It is also known as face value of a stock.

Issue of common stock for non cash assets or services: Corporations often issue common stock for the services received from attorneys or consultants as compensation, or for the purchase of non cash assets such as land, buildings, or equipment.

To Journalize: The entries to record the transactions.

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Selected stock transactions 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 followingtransactions affecting stockholders' equity were completed during the first year of operations: a. Issued 100,000 shares of stock at par to Paul Glenn for cash.b. Issued 3,000 shares of stock at par to Michele Kirby forpromotional services provided in connection with the organizationof the corporation and issued 45,000 shares of stock at par toMichele Kirby for cash. c. Purchased land and a building from Gretchen Northway inexchange for stock issued at par. The building is mortgaged for$180,000 for 20 years at 6%, and there is accrued interest of $5,200on the mortgage note at the time of the purchase. It is agreed thatthe land is to be priced at $60,000 and the building at $225,000 and that Gretchen North way's equity will be exchanged for stock at par.The…

Selected stock transactions Alpha Sounds Corp., an electric guitar retailer, was organized by Michele Kirby, Paul Glenn, and Gretchen Northway. The charter authorized 1,200,000 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 114,000 shares of stock at par to Paul Glenn for cash. 5 Issued 3,400 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.) 8 Purchased land and a building from Gretchen Northway in exchange for stock issued at par. The building is mortgaged for $189,900 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 $64,600 and the building at $224,100 and that…

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