Question

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Professional Products Inc., a wholesaler of office products, was organized on February 5 of the current year, with an authorization of 27,000 shares of preferred 2% stock, $100 par and 600,000 shares of $10 par common stock. The following selected transactions were completed during the first year of operations:

Feb.	5	Issued 213,000 shares of common stock at par for cash.
	5	Issued 400 shares of common stock at par to an attorney in payment of legal fees for organizing the corporation.
Apr.	9	Issued 69,400 shares of common stock in exchange for land, buildings, and equipment with fair market prices of $149,100, $505,120, and $164,700 respectively.
June	14	Issued 17,600 shares of preferred stock at $105 for cash.

JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1
2
3
4
5
6
7
8
9
10
11
12

Answer 1

	Journal Entry				Accounting   Equation
Date	Description	Post Reference	Dr $	Cr$	Asset	Liab/Equity
Feb 5.	Issue of 213,000 common stocks at par	GL 1	2,130,000		Cash
	for cash			2,130,000		Common Stock
Feb 5.	400 common stock issued at par for	GL 2	4,000		Organization cost
	legal fees of Attorney			4,000		Common Stock
Apr 9.	69400 Common stock issued against	GL 3	149,100		Land
	Fixed assets Amounting 818920		505,120		Building
			164,700		Equipment
				694,000		Common Stock
				124,920		Paid in Capital in excess of Par-Common stock
June 14.	17600 Pref shares issued for cash	GL 4	1,848,000		Cash
	@$105			1,760,000		Preferred Stock
				88,000		Paid in Capital in excess of Par-Preferred Stock