Answer to Question #256143 in Accounting for Nel

Question

Prepare journal entries for the following transactions: 9.Janella and Eloiza entered into a partnership contract wherein Janella invested 200,000 cash while Eloiza invested 100,000 worth office equipment. 10.Patrick purchase 1,000 shares of Music Corporation with par value of 100 for 250,000 cash. 11.Heisenberg Corporation issued 10,000 shares with par value of 100 in favor of Haydee in exchange of Haydee’s car with fair value of 2,000,000 12.Kelvin transferred the ownership of his parcel of land with a fair value of 3,000,000 to Hydra Corporation in exchange of 30,000 shares of Hydra Corporation with par value of 100.

Answer 1

Solution:

The journal entries are as follows:

 

9.). Dr. Cash                                                                                 200,000

     Dr. Office Equipment                                                             100,000

                        Cr, Janella, Capital                                                                               200,000

                        Cr. Eloiza, Capital                                                                                 100,000

(To record cash and office equipment contributed by the owner)

 

10.). Dr. Investment in Music Corporation                                  100,000

       Dr. Paid-in capital in excess of par value (250 – 100)        150,000

                         Cr. Cash                                                                                                 250,000

(To record purchase of Music corporation shares at a premium)

 

11.). Dr. Motor vehicle                                                              2,000,000

                          Cr. Common Stock (10,000 x 100)                                                   1,000,000

                          Cr. Paid-in capital in excess of par value (2M – IM)                      1,000,000

(To record the receipt of motor vehicle in exchange for stock)

 

12.). Dr. Common stock (30,000 x 100)                                    3,000,000

                           Cr. Land                                                                                            3,000,000

(To record the receipt of stock in exchange for land)