Alpha Sounds Corp., an electric guitar retailer, was organized by Michele Kirby, Paul Glenn, and Gretchen Northway. The charter authorized 1,000,000 shares ofcommon stockwith aparof $1.

Journalize the entries to record the following transactions affectingstockholders equity, which were completed during the first year of operations. Refer to the Chart of Accounts for exact wording of account titles.

Jan. 2 Issued 100,000 shares of stock at par to Paul Glenn for cash.

5 Issued 3,000 shares of stock at par to Michele Kirby for promotional services provided in connection with the organization of the corporation, and issued 45,000 shares of stock at par to Michele Kirby for cash.

8 Purchased land and a building from Gretchen Northway in exchange for stock issued at par. The building is mortgaged for $180,000 for 20 years at 6%, and there is accrued interest of $5,200 on the mortgage note at the time of the purchase. It is agreed that the land is to be priced at $60,000 and the building at $225,000 and that Gretchen Northways equity will be exchanged for stock at par. The corporation agreed to assume responsibility for paying the mortgage note and the accrued interest.

CHART OF ACCOUNTS

Alpha Sounds Corp.General Ledger

ASSETS

110Cash

120 Accounts Receivable

131 Notes Receivable

132 Interest Receivable

141 Merchandise Inventory

145 Office Supplies

151 Prepaid Insurance

181 Land

191 Building

192 Accumulated Depreciation-Building

LIABILITIES

210 Accounts Payable

221 Notes Payable

226 Interest Payable

231 Cash Dividends Payable

236 Stock Dividends Distributable

241 Salaries Payable

261 Mortgage Note Payable

EQUITY

311 Common Stock

312 Paid-In Capital in Excess of Par-Common Stock

315 Treasury Stock

321 Preferred Stock

322 Paid-In Capital in Excess of Par-Preferred Stock

331 Paid-In Capital from Sale of Treasury Stock

340 Retained Earnings

351 Cash Dividends

352 Stock Dividends

390 Income Summary

REVENUE

410 Sales

610 Interest Revenue

EXPENSES

510 Cost of Merchandise Sold

515 Credit Card Expense

520 Salaries Expense

531 Advertising Expense

532 Delivery Expense

533 Selling Expenses

534 Rent Expense

535 Insurance Expense

536 Office Supplies Expense

537 Organizational Expenses

561 Depreciation Expense-Building

590 Miscellaneous Expense

710 Interest Expense