Question

Lake Ltd. was incorporated on July 1, 2013. The company is authorized to issue an unlimited number of preferred and common shares. The company entered into the following transactions during its fiscal year ending June 30, 2014:

Jul 10 Issued 100,000 common shares for $12.50 per share.

Jul 15 Issued 400,000 common shares for $13 per share.

Sep 30 Issued 30,000 common shares in return for a warehouse. The common shares were trading for $15.50 on the date the warehouse was acquired.

Mar 16 Issued 1,000 preferred shares for $95 per share.

Instructions

1. Record the above transactions on the general journal template.

Answer 1

Date	Account Titles & Explanations	Debit	Credit
Jul.10,2013	Cash ( 100,000 x 12.50 )	1,250,000
	Common Stock		1,250,000
	(Being Common Stock issued for cash)
Jul.15,2013	Cash ( 400,000 x 13 )	5,200,000
	Common Stock		5,200,000
	(Being Common Stock issued for cash)
Sep.30,2013	Warehouse	465,000
	Common Stock (30,000 x 15.50 )		465,000
	(Being Common Stock issued in return for a warehouse)
Mar.16, 2014	Cash ( 1,000 x 95 )	95,000
	Preferred Stock		95,000
	(Being Preferred Stock issued for cash)

Note: In absence of par value of common & preferred stock, it has been assumed that they are with No Par value.