On July 11, American Lift Corporation, a wholesaler of hydraulic lifts, acquired
ID: 2423183 • Letter: O
Question
On July 11, American Lift Corporation, a wholesaler of hydraulic lifts, acquired land in exchange for 7,400 shares of $5 par common stock with a current market price of $35.
Journalize the entry to record the transaction. Refer to the Chart of Accounts for exact wording of account titles.
CHART OF ACCOUNTS
American Lift Corporation
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
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 entry to record the transaction. Refer to the Chart of Accounts for exact wording of account titles.
PAGE 10
JOURNAL
DATE
DESCRIPTION
POST. REF.
DEBIT
CREDIT
1
2
3
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
562
Depreciation Expense-Equipment
590
Miscellaneous Expense
710
Interest Expense
CHART OF ACCOUNTS
American Lift Corporation
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
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 entry to record the transaction. Refer to the Chart of Accounts for exact wording of account titles.
PAGE 10
JOURNAL
DATE
DESCRIPTION
POST. REF.
DEBIT
CREDIT
1
2
3
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
562
Depreciation Expense-Equipment
590
Miscellaneous Expense
710
Interest Expense
Explanation / Answer
July 2011:
Land (181) a/c Dr $259000
To Common Stock (311) a/c $37000
To Paid-in Capital in excess of Par-Common Stock (312) a/c $222000
[Being Common Stock issued in exchane of land]
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