Question

Issuing Stock Work Place Products Inc., a wholesaler of office products, was organized on July 1 of the current year, with an authorization of 125,000 shares of 1% preferred stock, $50 par and 500,000 shares of $25 par common stock. The following selected transactions were completed during the first year of operations: Journalize the transactions. July. 1. Issued 145,000 shares of common stock at par for cash. July. 1 July. 1 Issued 500 shares of common stock at par to an attorney in payment of legal fees for organizing the corporation. July. 1 Aug. 7. Issued 26,000 shares of common stock in exchange for land, buildings, and equipment with fair market prices of $122,000, $665,000, and $149,000, respectively. For a compound transaction, if an amount box does not require an entry, leave it blank. Aug. 7 Sept. 20. Issued 25,000 shares of preferred stock at $61 for cash. For a compound transaction, if an amount box does not require an entry, leave it blank. Sept. 20

Answer 1

• All working forms part of the answer

Date	Accounts	Debit	Credit	Working
01-Jul	Cash	$     3,625,000.00		[145000 shares x $25]
	Common Stock		$    3,625,000.00	[145000 shares x $25]
	(Common Stock issued for Cash)
01-Jul	Organisational Expenses	$           12,500.00		[500 shares x $25]
	Common Stock		$          12,500.00	[500 shares x $25]
	(Common Stock issued for legal fees)
07-Aug	Land	$        122,000.00
	Building	$        665,000.00
	Equipment	$        149,000.00
	Common Stock		$        650,000.00	[26000 shares x $ 25]
	Paid in Capital in excess of Par - Common Stock		$        286,000.00	[balancing figure]
	(Common Stock issued)
20-Sep	Cash	$     1,525,000.00		[25000 shares x $ 61]
	Preferred Stock		$    1,250,000.00	[25000 shares x $ 50]
	Paid in Capital in excess of Par - Preferred Stock		$        275,000.00	[25000 shares x $ 11]
	(Preferred Stock issued)