Chapter $12-$ Handout #$1-$ Journalizing Stock Transactions $($Acct&$202)$

Alpha Sounds Corp., an electric guitar retailer, was organized by Michele Kirby, Paul Glenn, and Gretchen Northway. The charter authorized $200,000$ shares of $3\%$ preferred stock with a par of $$25$ and $1,000,000$ shares of common stock with a par of $$1.$ The following transactions affecting stockholders' equity were completed during the first year of operations:

Issued $100,000$ shares of common stock for $$1$ per share for cash.

Issued $100,000$ shares of common stock for $$1\mathrm{.}50$ per share for cash.

Issued $50,000$ shares of preferred stock for $$30$ per share for cash.

Issued $3,000$ shares of stock at par to Michele Kirby for promotional services provided in connection with the organization of the corporation. The promotional services are valued at $$5,000.$

Purchased a building from Gretchen Northway in exchange for $200,000$ shares of stock. The building has a fair value of $$360,000$ and the common stock value cannot be determined.

Assume #$5$ but that the common stock value is determined to be $$2$ per share and the company want to use this value to record the transaction instead of the building value.

Now assume that the common stock was no$-$par stock. How would this change your entries?

Now assume that the common stock was no$-$par stock, but had a stated value of $$1$ per share, how would this change your entries?

Journalize the entries to record the transactions and show impact on the accounting equation.