Question

Alpha Sounds Corp., an electric guitar retailer, was organized by Michele Kirby, Paul Glenn, and Gretchen Northway. The charter authorized 1,100,000 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 83,000 shares of stock at par to Paul Glenn for cash.
	5	Issued 3,800 shares of stock at par to Michele Kirby for promotional services provided in connection with the organization of the corporation and issued 45,400 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 $170,100 for 20 years at 6%, and there is accrued interest of $4,900 on the mortgage note at the time of the purchase. It is agreed that the land is to be priced at $59,800 and the building at $223,600 and that Gretchen Northway’s equity will be exchanged for stock at par. The corporation agreed to assume responsibility for paying the mortgage note and the accrued interest.

Journalize the entries to record the transactions. Refer to the Chart of Accounts for exact wording of account titles.

Journal

Journalize the entries to record the transactions. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 1

JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1
2
3
4
5
6
7
8
9
10
11

Answer 1

Answer
Journal entry
No.	Account Titles and Explanations	Debit	Credit
a)	Cash A/c Dr.	$         83,000
	To, Common Stock A/c (83,000 shares * 1 per share)		$         83,000
b)	Promotional Expenses A/c	$ 700
	To, Common Stock A/c (700 shares * 1 per share)		$ 700
	Cash A/c Dr.	$         45,400
	To, Common Stock A/c (45,400 shares * 1 per share)		$         45,400
c)	Land A/c	$         59,800
	Building A/c	$      2,23,600
	To, Mortgage Notes Payable A/c		$      1,70,100
	To, Interest accrued on mortgage A/c		$           4,900
	To, Common Stock A/c		$      1,08,400
Please Like