Answer:
The Journal entries are detailed in the explanation
Feb 5: Debit Cash a/c and credit common stock with $5,600,000
Debit Legal fees and credit common stock with $9,600
April 9: Debit Land 120,000, building 280,000 and equipment 80,000 and credit common stock $320,000 and excess capital $160,000
June 14: Debit cash $2,050,000 credit Pref stock with $1,500,000 and excess capital with $550,000
Explanation:
The question is to journalize the transactions of Professional Products inc as follows
Date Particulars/Description Debit Credit
5th Feb Cash A/c 5,600,000
Common Stock 5,600,000
Being the issue of 700,000 shares of common stock at par for cash
5th Feb Legal Fees A/c 9,600
Common Stock 9,600
Being the issue of 1200 shares of common stock at par for legal fees
9th April Land A/c 120,000
Building A/c 280,000
Equipment A/c 80,000
Common Stock (40,000 x 8 ) 320,000
Capital Paid in Excess of Par 160,000
Being the issue of 40,000 shares in exchange for land, building and equipment.
14th June Cash A/c 2,050,000
2% Preferred Stock ($60 x 45,000) 1,500,000
Pref. Capital Paid in Excess of Par 550,000
Being the issuance of 25,000 shares of Preferred stock at $82
