Occupational Products Inc., a wholesaler of office products, was organized on Ma
ID: 2423174 • Letter: O
Question
Occupational Products Inc., a wholesaler of office products, was organized on March 1 of the current year, with an authorization of 25,000 shares of preferred 2% stock, $100 par and 550,000 shares of $10 par common stock. The following selected transactions were completed during the first year of operations:
Mar.
1
Issued 243,000 shares of common stock at par for cash.
1
Issued 600 shares of common stock at par to an attorney in payment of legal fees for organizing the corporation.
May
31
Issued 68,000 shares of common stock in exchange for land, buildings, and equipment with fair market prices of $147,400, $518,700 and $163,500 respectively.
Jul.
1
Issued 16,000 shares of preferred stock at $112 for cash.
Journalize the transactions. Refer to the Chart of Accounts for exact wording of account titles.
CHART OF ACCOUNTS
Occupational Products Inc.
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
193
Equipment
194
Accumulated Depreciation-Equipment
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
Common Stock
312
Paid-In Capital in Excess of Par-Common Stock
315
Treasury Stock
321
Preferred Stock
322
Paid-In Capital in Excess of Par-Preferred Stock
331
Paid-In Capital from Sale of Treasury Stock
340
Retained Earnings
351
Cash Dividends
352
Stock Dividends
390
Income Summary
Journalize the transactions. Refer to the Chart of Accounts for exact wording of account titles.
PAGE 1
JOURNAL
DATE
DESCRIPTION
POST. REF.
DEBIT
CREDIT
1
2
3
4
5
6
7
8
9
10
11
12
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
562
Depreciation Expense-Equipment
590
Miscellaneous Expense
710
Interest Expense
Mar.
1
Issued 243,000 shares of common stock at par for cash.
1
Issued 600 shares of common stock at par to an attorney in payment of legal fees for organizing the corporation.
May
31
Issued 68,000 shares of common stock in exchange for land, buildings, and equipment with fair market prices of $147,400, $518,700 and $163,500 respectively.
Jul.
1
Issued 16,000 shares of preferred stock at $112 for cash.
Explanation / Answer
Answer:
1 March Issued 243,000 shares of common stock at par for cash.
243,000 x $10 par =243,0000
Dr Cash 2430000
Cr Common Stock 2430000
1 March Issued 600 shares of common stock at par to an attorney in payment of legal fees for organizing the corporation.
600 x 10 = 6000
Dr Legal Fees 6,000
Cr Common Stock 6,000
31 May Issued 68,000 shares of common stock in exchange for land, buildings, and equipment with fair market prices of $147,400, $518,700 and $163,500 respectively.
Dr Building 518,700
Dr Land 147,400
Dr Equipment 163,500
Cr Common Stock 680,000 (68,000 x 10)
Cr Paid-In Capital in Excess of Par, Common Stock 149600
1 july Issued 16,000 shares of preferred stock at $112 for cash.
Dr Cash 1792000
Cr Preferred Stock 1,600,000 (16,000 x 100)
Cr Paid-In Capital in Excess of Par, Preferred Stock 192000
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