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aleksandrvk [35]
3 years ago
13

Alpha Sounds Corp., an electric guitar retailer, was organized by Michele Kirby, Paul Glenn, and Gretchen Northway. The charter

authorized 1,000,000 shares of common stock with a par of $1. The following transactions affecting stockholders’ equity were completed during the first year of operations:
Issued 100,000 shares of stock at par to Paul Glenn for cash.

Issued 3,000 shares of stock at par to Michele Kirby for promotional services provided in connection with the organization of the corporation, and issued 45,000 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 $180,000 for 20 years at 6%, and there is accrued interest of $5,200 on the mortgage note at the time of the purchase. The corporation agreed to assume responsibility for paying the mortgage note and accrued interest. It is agreed that the land is to be valued at $60,000 and the building at $225,000 and that Gretchen Northway will be issued stock at par.

Journalize the entries to record the transactions.
Business
1 answer:
snow_lady [41]3 years ago
7 0
I just needed some points to figure things out i don’t do anything else
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On December 2, Coley Corp. acquired 1,600 shares of its $3 par value common stock for $21 each. On December 20. Coley Corp. reis
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Answer:

(A) Credit Additional Paid in Capital $9,600

Explanation:

As provided earlier, shares of own company were acquired, at a premium, which creates a treasury account with the amount of purchase back of shares.

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Further when shares are resold the paid in capital account is credited,

Additional capital to be credited = $11 - $3 = $8 per share

$8 \times 1,200 shares = $9,600

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Therefore option c) is also invalid.

Therefore, Correct option is

(A) Credit Additional Paid in Capital $9,600

4 0
3 years ago
A company paid $200 cash for supplies that were purchased last month. However, the company recorded a debit to Accounts Payable
hjlf

This company's accounting records are: Incorrect because debits side  do no equal credits side.

<h3>Accounting record</h3>

Based on the information given their is an error when recording the journal entry reason  been that we are supposed to credit cash with the amount of $200 and not $20.

Due to this error this company's accounting records will be wrong or  Incorrect based on the fact that the  debits side  do no equal credits side.

The principle of accounting entry states that "Every debit entry must have a corresponding credit entry and every credit entry must have a corresponding debit entry"

The correct entry was supposed to be:

Debit Account payable $200

Credit Cash $200

Inconclusion  this company's accounting records are: Incorrect because debits side  do no equal credits side.

Learn more about accounting record here:brainly.com/question/26282268

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2 years ago
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