Alpha Sounds Corp., an electric guitar retailer, was organized by Michele Kirby, Paul Glenn, and Gretchen Northway. The charter authorized 450,000 shares of common stock with a par of $35. The following transactions affecting stockholders' equity were completed during the first year of operations.

Journalize the entries to record the transactions.

a. Purchased land and a building from Gretchen Northway in exchange for stock issued at par. The building is mortgaged for $429,000 for 20 years at 7% and there is accrued interest of $8,500 on the mortgage note at the time of the purchase. It is agreed that the land is to be priced at $145,000 and the building at $640,000, and that Northways equity will be exchanged for stock at par. The corporation agreed to assume responsibility for paying the mortgage note and the accrued interest.