Question Content Area

Selected stock transactions

Alpha Sounds Corp., an electric guitar retailer, was organized by Michele Kirby, Paul Glenn, and Gretchen Northway. The charter authorized 600,000 shares of common stock with a par of $1. The following transactions affecting stockholders' equity were completed during the first year of operations.

Journalize the entries to record the transactions.

If an amount box does not require an entry, leave it blank.

Question Content Area

a. Issued 11,500 shares of stock at par to Paul Glenn for cash.

blank	Account	Debit	Credit
blank	CashCommon StockPaid-In Capital in Excess of Par-CommonPaid-In Capital in Excess of Par-PreferredPreferred StockCash	Cash	Cash
	CashCommon StockPaid-In Capital in Excess of Par-CommonPaid-In Capital in Excess of Par-PreferredPreferred StockCommon Stock	Common Stock	Common Stock

Question Content Area

b. (1) Issued 800 shares of stock at par to Michele Kirby for promotional services provided in connection with the organization of the corporation, and (2) issued 17,000 shares of stock at par to Michele Kirby for cash.

Transaction	Account	Debit	Credit
(1)	Common StockOrganizational ExpensesPaid-In Capital in Excess of Par-CommonPreferred StockRetained EarningsOrganizational Expenses
	CashCommon StockOrganizational ExpensesPaid-In Capital in Excess of Par-CommonPreferred StockCommon Stock
(2)	CashCommon StockPaid-In Capital in Excess of Par-CommonPreferred StockRetained EarningsCash
	CashCommon StockOrganizational ExpensePaid-In Capital in Excess of Par-CommonPreferred StockCommon Stock

Question Content Area

c. Purchased land and a building from Gretchen Northway in exchange for stock issued at par. The land has a fair value of $60,000, and the building has a fair value of $120,000.

blank	Account	Debit	Credit
blank	CashCommon StockInterest PayableLandMortgage Note Payable
	BuildingCommon StockInterest PayableMortgage Note PayablePaid-In Capital in Excess of Par
	CashCommon StockLandPaid-In Capital in Excess of ParRetained Earnings