Question

During its first year of operations, Eastern Data Links Corporation entered into the following transactions relating to shareholders’ equity. The articles of incorporation authorized the issue of 10 million common shares, $1 par per share, and 1 million preferred shares, $50 par per share.

Feb.		12		Sold 2 million common shares, for $9 per share.
		13		Issued 38,000 common shares to attorneys in exchange for legal services.
		13		Sold 78,000 of its common shares and 5,500 preferred shares for a total of $1,030,000.
Nov.		15		Issued 415,000 of its common shares in exchange for equipment for which the cash price was known to be $3,968,000.

Prepare the appropriate journal entries to record each transaction. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field. Enter your answers in whole dollars.)

Sold 2 million common shares, for $9 per share.

Issued 38,000 common shares to attorneys in exchange for legal services.

Sold 78,000 of its common shares and 5,500 preferred shares for a total of $1,030,000.

Issued 415,000 of its common shares in exchange for equipment for which the cash price was known to be $3,968,000

Answer 1

Date	General Journal	Debit	Credit
February 12	Cash	18000000		=2000000*9
	Common Stock		2000000
	Paid in capital in excess of par-Common Stock		16000000
February 13	Legal expense	342000		=38000*9
	Common Stock		38000
	Paid in capital in excess of par-Common Stock		304000
February 13	Cash	1030000
	Common Stock		78000
	Paid in capital in excess of par-Common Stock		624000	=78000*(9-1)
	Preferred Stock		275000	=5500*50
	Paid in capital in excess of par-Preferred Stock		53000
November 15	Property, Plant and Equipment	3968000
	Common Stock		415000
	Paid in capital in excess of par-Common Stock		3553000