Fantastic Sounds Corp., an electric guitar retailer, was organized by Pam Mikhail, Jane Lo, and Dale Nadal. The charter authorized 400,000 shares of common stock with a par of $50. The following transactions affecting stockholders’ equity were completed during the first year of operations:
a. Issued 20,000 shares of stock at par to Pam Mikhail for cash.
b. Issued 1,000 shares of stock at par to Dale Nadal for promotional services provided in connection with the organization of the corporation, and issued 15,000 shares of stock at par to Dale Nadal for cash.
c. Purchased land and a building from Jane Lo. The building is mortgaged for $300,000 for 20 years at 5% and there is accrued interest of $2,500 on the mortgage note at the time of the purchase. It is agreed that the land is to be priced at $200,000 and the building at $500,000, and that Jane Lo’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.