This short exercise demonstrates the similarity and the difference between two ways to acquire plant assets.

$($i$)($Click the icon to view the cases.$)$

Compare the balances in all the accounts after making both sets of entries. Are the account balances the same or different?

Journalize the transactions for cases A and B$.($Record debits first, then credits. Exclude explanations from any journal entries.$)$

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Case $A-$ Issue stock and buy the assets in separate transactions:

Ashley Company issued $20,000$ shares of its $$1$ par common stock for cash of $$700,000.$ In a

separate transaction, Ashley used the cash to purchase a building for $$600,000$ and equipment for $$100,000.$

Journalize the two transactions.

Case $B-$ Issue stock to acquire the assets in a single transaction:

Ashley Company issued $20,000$ shares of its $$1$ par common stock to acquire a building with a market value of

$$600,000$ and equipment with a market value of $$100,000.$ Journalize this transaction.