Question

In June, current year, Wendy Winger organized a corporation to provide aerial photography services. The company, called Aerial Views, began operations immediately. Transactions during the month of June were as follows. June 1 The corporation issued 60,000 shares of capital stock to Wendy Winger in exchange for $60,000 cash. June 2 Purchased a plane from Utility Aircraft for $220,000. Made a $40,000 cash down payment and issued a note payable for the remaining balance.Prepare a journal entry.

Answer 1

Answer:

1  

Cash_________60000  

Common stock________60000

Issued 60000 shares of capital  

 

2  

Plane________220000  

Cash________________40000

Account payable_______180000

Purchase to Utility Aircrafy

Explanation:

Capital stock is the number of common and preferred shares that a company is authorized to issue, according to its corporate charter. The amount received by the corporation when it issued shares of its capital stock is reported in the shareholders' equity section of the balance sheet

1  

Cash_________60000  

Common stock________60000

Issued 60000 shares of capital  

 

2  

Plane________220000  

Cash________________40000

Account payable_______180000

Purchase to Utility Aircraft