Question

Issuing Stock

Professional Products Inc., a wholesaler of office products, was organized on February 5 of the current year, with an authorization of 100,000 shares of preferred 3% stock, $65 par and 700,000 shares of $10 par common stock. The following selected transactions were completed during the first year of operations:

Journalize the transactions.

Feb. 5. Issued 105,000 shares of common stock at par for cash.

Feb. 5.

Feb. 5. Issued 400 shares of common stock at par to an attorney in payment of legal fees for organizing the corporation.

Feb. 5.

Apr. 9. Issued 18,000 shares of common stock in exchange for land, buildings, and equipment with fair market prices of $33,000, $179,000, and $40,000, respectively.

If an amount box does not require an entry, leave it blank.

Apr. 9.

June 14. Issued 35,000 shares of preferred stock at $76 for cash.

If an amount box does not require an entry, leave it blank.

June 14.

Answer 1

Date	Account title and explanations	Debit	Credit
Feb - 5	Cash      (105000 X 10)	$1050000
	Common stock		$1050000
	(issued 105000 shares at @ $10 par for cash)
Feb -5	Legal Charges (400 X 10)	$4000
	Common stock		$4000
	(Issue of 400 common stock for consideration of legal services)
April -9	Land	$33000
	Building	$179000
	Equipment	$40000
	Common stock              (18000 X 10)		$180000
	Paid in capital in excess of par –common stock		$72000
	(Issue of common stock as consideration for acquisition of land , building and equipment)
Jun -14	Cash (35000 X $76)	$2660000
	Preferred stock (35000 x 65)		$2275000
	Paid in capital in excess of par – Preferred stock (35000 X 11)		$385000
	(Issue of preferred stock of 35000 at $76)