Express the following independent transactions in journal-entry form. If an entry is not required, indicate the reason. You may omit explanations for the journal entries.

(1) Bonds of the Sommers Company with a face value of $50,000 and annual interest at the rate of 8 percent are purchased for $51,500 cash.

(2) A check for $4,000 is received by a fire insurance company for premiums on policy coverage Over the next 2 years.

(3) A corporation issues 30,000 shares of $12-par value common stock in exchange for land, building, and equipment. The land is to be stated at $40,000, the building at $260,000, and the equipment at $100,000.

(4) A contract is signed by a manufacturing firm agreeing to purchase 100 dozen machine tool parts over the next 2 years at a price of $40 per dozen.

(5) Five thousand shares of $1-par value preferred stock are issued to an attorney for legal services rendered in organization of the corporation. The bill for the services 1s $8,500.

(6) A coupon book, redeemable in movie viewings, is issued for $50 cash by a movie theater.

(7) A firm has been notified that it is being sued for $20,000 damages by a customer who incurred losses as a result of purchasing defective merchandise.
(8) Merchandise inventory costing $3,000, purchased on account, is found to be defective and returned to the supplier for full credit.