Question

Deck company was authorized to issue $250,000 shares of $24 par value common stock on December 28, 2017. The following transactions occurred in 2017:

January 14	Issued 45,000 shares of common stock for $30 per share
Jan 29	Gave the lawyers of the company 25,000 shares of common stock for their services in organizing the company. The board of directors valued services at $744,000
Jan 30	Exchanged 50,000 shares of common stock for the following assets at the indicated fair market values:
Land	$216.000
Building	$528,000
Machinery	$720,000

Prepare the general journal entries for all of the above transactions.

Answer 1

Solution:

Journal Entries - Deck Company
Date	Particulars	Debit	Credit
14-Jan	Cash Dr (45000*$30)	$1,350,000.00
	To Common stock (45000*$24)		$1,080,000.00
	To Paid in capital in excess of par value - Common stock (45000*$6)		$270,000.00
	(To record issue of common stock)
29-Jan	Organization expense Dr	$744,000.00
	To Common stock (25000*$24)		$600,000.00
	To Paid in capital in excess of par value - Common stock		$144,000.00
	(To record issue of common stock as consideration for service availed)
30-Jan	Land Dr	$216,000.00
	Building Dr	$528,000.00
	Machinery Dr	$720,000.00
	To Common stock (50000*$24)		$1,200,000.00
	To Paid in capital in excess of par value - Common stock		$264,000.00
	(To record purchase of assets by issuing common stock)