2.Issued 40,000 common shares to attorneys in exchange for legal services. 3.Sol

Question

2.Issued 40,000 common shares to attorneys in exchange for legal services.

3.Sold 80,000 of its common shares and 4,000 preferred shares for a total of $945,000

4.Issued 380,000 of its common shares in exchange for equipment for which the cash price was known to be $3,688,000.

During its tirst year ot operations, Eastern Data Links Corporation entered into the tollowing transactions relating to shareholders equity. The articles of incorporation authorized the issue of 8 million common shares, $1 par per share, and 1 million preferred shares, $50 par per share. Feb. 12 Sold 2 million common shares, for $9 per share 13 Issued 40,000 common shares to attorneys in exchange for legal services. 13 Sold 80,000 of its common shares and 4,000 preferred shares for a total of $945,000. Nov. 15 Issued 380,000 of its common shares in exchange for equipment for which the cash price was known to be $3,688,000 Required Prepare the appropriate journal entries to record each transaction. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field. Enter your answers in whole dollars.) View transaction list Journal entry worksheet 2 4 Sold 2 million common shares, for $9 per share. Note: Enter debits before credits. Date General Journal Debit Credit February 12

Explanation / Answer

Journal Entry Date Particulars Dr. Amt. Cr. Amt. 12-Feb Cash    18,000,000.00 2,000,000 Shares X $9 Common stock      2,000,000.00 2,000,000 Shares X $1 Paid in Capital in Excess of Par - Common Stock    16,000,000.00 2,000,000 Shares X $8 (Record the issue of Common stock) 13-Feb Legal Expenses          360,000.00 40,000 Shares X $9 Common stock            40,000.00 40,000 Shares X $1 Paid in Capital in Excess of Par - Common Stock          320,000.00 40,000 Shares X $8 (Record the issue of Common stock against Legal services) 13-Feb Cash          945,000.00 Common stock            80,000.00 80,000 Shares X $1 Paid in Capital in Excess of Par - Common Stock          640,000.00 80,000 Shares X $8 Preferred stock          200,000.00 4,000 Shares X $50 Paid in Capital in Excess of Par - Preferred Stock            25,000.00 (Record the issue of Common stock & Preferred stock) 15-Nov Equipment      3,688,000.00 Common stock          380,000.00 380,000 Shares X 1 Paid in Capital in Excess of Par - Common Stock      3,308,000.00 (record the Purchase of equipment in exchange of Common Stock)

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