Willow Creek Nursery, with an authorization of 78,000 shares of preferred stock and 190,000 shares of common stock, completed several transactions involving its stock on October 1, the first day of operations. The trial balance at the close of the day follows:

Willow Creek Nursery

UNADJUSTED TRIAL BALANCE

October 1, 20--

	ACCOUNT TITLE	DEBIT	CREDIT
1	Cash	3,264,000.00
2	Land	896,000.00
3	Buildings	2,784,000.00
4	Preferred 1% Stock, $80 par		3,200,000.00
5	Paid-In Capital in Excess of Par-Preferred Stock		480,000.00
6	Common Stock, $30 par		3,060,000.00
7	Paid-In Capital in Excess of Par-Common Stock		204,000.00
8	Totals	6,944,000.00	6,944,000.00

All shares within each class of stock were sold at the same price. The preferred stock was issued in exchange for the land and buildings.

Journalize the two entries to record the transactions summarized in the trial balance. Refer to the Chart of Accounts for exact wording of account titles.

Chart of Accounts

CHART OF ACCOUNTS

Willow Creek Nursery

General Ledger

	ASSETS
110	Cash
120	Accounts Receivable
131	Notes Receivable
132	Interest Receivable
141	Merchandise Inventory
145	Office Supplies
151	Prepaid Insurance
181	Land
191	Buildings
192	Accumulated Depreciation-Buildings

	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	Preferred Stock
312	Paid-In Capital in Excess of Par-Preferred Stock
315	Treasury Stock
321	Common Stock
322	Paid-In Capital in Excess of Par-Common 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-Buildings
590	Miscellaneous Expense
710	Interest Expense

Journal

Journalize the two entries to record the transactions summarized in the trial balance. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 1

JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
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