Question & Answer: Alpha Sounds Corp., an electric guitar retailer, was organized by Michele Kirby, Paul Glenn, and Gretchen Northway. The c…..

Insert Design Layout References Malings Review View Alpha Sounds Corp., an electric guitar retailer, was organized by Michele Kirby, Paul Glenn, and Gretchen Northway. The charter authorized 1,100,000 shares of common stock with a par of $1. Journalize the entries to record the following transactions affecting stockholders equity, which were completed during the first year of operations. Refer to the Chart of Accounts for exact wording of saccount titles. Issued 83,000 shares of stock at par to Paul Glenn for cash. Issued 3,800 shares of stock at par to Michele Kirby for promotional services provided in connection with the organization of the corporation, and issued 45,400 shares of stock at par to Michele Kirby for cash. Purchased land and a building from Gretchen Northway in exchange for stock issued at par. The building is mortgaged for $170,100 for 20 years at 6%, and there is accrued interest of $4,900 on the mortgage note at the time of the purchase. It is agreed that the land is to be priced at $59,800 and the building at $223,600 and that Gretchen Northways equity will be exchanged for stock at par. The corporation agreed to assume responsibility for paying the mortgage note and the accrued interest. Jan. 2 5 8

Alpha Sounds Corp., an electric guitar retailer, was organized by Michele Kirby, Paul Glenn, and Gretchen Northway. The charter authorized 1, 100,000 shares of common stock with a par of $1. Journalize the entries to record the following transactions affecting stockholders equity, which were completed during the first year of operations. Refer to the Chart of Accounts for exact wording of account titles.

Expert Answer

Jan 2

Dr Cash $83,000

Cr Common Stock $83,000

Jan 5

Dr Organisational Expenses $3800

Dr Cash $45,400

Cr Common Stock $49,200

Jan 8

Dr Land $59,800

Dr Building $223,600

Cr Common Stock $283,400

Jan 8

Dr Mortgage Note Payable $170,100

Dr Interest Payable $4900

Cr Cash $175,000

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