Alpha Sounds Corp., an electric guitar retailer, was organized by Michele Kirby, Paul Glenn, and Gretchen Northway. The charter authorized 1,100,000 shares of common stock with a par of $1. The following transactions affecting stockholders' equity were completed during the first year of operations: Jan. 2 Issued 102,000 shares of stock at par to Paul Glenn for cash. Issued 3,600 shares of stock at par to Michele Kirby for promotional services provided in connection with the organization of the corporation and issued 42,500 shares of stock at par to Michele Kirby for cash. (record as two separate transactions.) Purchased land and a building from Gretchen Northway in exchange for stock issued at par. The building is mortgaged for $177,100 for 20 years at 6%, and there is accrued interest of $4,700 on the mortgage note at the time of the purchase. It is agreed that the land is to be priced at $57,800 and the building at $228,500 and that Gretchen Northway's equity will be exchanged for stock at par. The corporation agreed to assume responsibility for paying the mortgage note and the accrued interest.

Alpha Sounds Corp., an electric guitar retailer, was organized by Michele Kirby, Paul Glenn, and Gretchen Northway. The charter authorized 1,100,000 shares of common stock with a par of $1. The following transactions affecting stockholders' equity were completed during the first year of operations: Jan. 2 Issued 102,000 shares of stock at par to Paul Glenn for cash. Issued 3,600 shares of stock at par to Michele Kirby for promotional services provided in connection with the organization of the corporation and issued 42,500 shares of stock at par to Michele Kirby for cash. (record as two separate transactions.) Purchased land and a building from Gretchen Northway in exchange for stock issued at par. The building is mortgaged for $177,100 for 20 years at 6%, and there is accrued interest of $4,700 on the mortgage note at the time of the purchase. It is agreed that the land is to be priced at $57,800 and the building at $228,500 and that Gretchen Northway's equity will be exchanged for stock at par. The corporation agreed to assume responsibility for paying the mortgage note and the accrued interest.

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter13: Corporations: Organization, Stock Transactions, And Dividends

Section: Chapter Questions

Problem 3PA: The following selected accounts appear in the ledger of EJ Construction Inc. at the beginning of the...

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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:a. Issued 100,000 shares of stock at par to Paul Glenn for cash.b. 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.c. 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. It is agreed that the land is to be priced at $60,000 and the building at $225,000 and that Gretchen Northway’s equity will be exchanged for stock at par. The corporation agreed to…
Alpha Sounds Corp., an electric guitar retailer, was organized by Michele Kirby, Paul Glenn, and Gretchen Northway. The charter authorized 1,100,000 shares of common stock with a par of $1. The following transactions affecting stockholders’ equity were completed during the first year of operations: Jan. 2 Issued 80,000 shares of stock at par to Paul Glenn for cash. 5 Issued 3,700 shares of stock at par to Michele Kirby for promotional services provided in connection with the organization of the corporation and issued 49,700 shares of stock at par to Michele Kirby for cash. (record as two separate transactions.) 8 Purchased land and a building from Gretchen Northway in exchange for stock issued at par. The building is mortgaged for $171,800 for 20 years at 6%, and there is accrued interest of $5,100 on the mortgage note at the time of the purchase. It is agreed that the land is to be priced at $61,200 and the building at $224,800 and that Gretchen Northway’s equity will be…
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