Case A -

building	$ ?
equipment	$ ?
cash	$ ?

Case B -

building	$ ?
equipment	$ ?
common stock	$ ?
paid-in-captital in excess of par--common	$ ?

 

Transcribed Image Text:

This short exercise demonstrates the similarity and the difference between two ways to acquire plant assets. i (Click the icon to view the cases.) Compare the balances in all the accounts after making both sets of entries. Are the account balances the same or different? Journalize the transactions for cases A and B. (Record debits first, then credits. Exclude explanations from any journal entries.) Let's begin with case A - Record the issuance of the common stock. Journal Entry Accounts Cash Common Stock Paid-in Capital in Excess of Par-Common Debit 1000000 Credit More info C Case A - Issue stock and buy the assets in separate transactions: Hampton Company issued 15,000 shares of its $10 par common stock for cash of $1,000,000. In a separate transaction, Hampton used the cash to purchase a building for $525,000 and equipment for $475,000. Journalize the two transactions. Case B- Issue stock to acquire the assets in a single transaction: Hampton Company issued 15,000 shares of its $10 par common stock to acquire a building with a market value of $525,000 and equipment with a market value of $475,000. Journalize this transaction. This short exercise demonstrates the similarity and the difference between two ways to acquire plant assets. i (Click the icon to view the cases.) Compare the balances in all the accounts after making both sets of entries. Are the account balances the same or different? Journalize the transactions for cases A and B. (Record debits first, then credits. Exclude explanations from any journal entries.) Let's begin with case A - Record the issuance of the common stock. Journal Entry Accounts Cash Common Stock Paid-in Capital in Excess of Par-Common Debit 1000000 Credit More info C Case A - Issue stock and buy the assets in separate transactions: Hampton Company issued 15,000 shares of its $10 par common stock for cash of $1,000,000. In a separate transaction, Hampton used the cash to purchase a building for $525,000 and equipment for $475,000. Journalize the two transactions. Case B- Issue stock to acquire the assets in a single transaction: Hampton Company issued 15,000 shares of its $10 par common stock to acquire a building with a market value of $525,000 and equipment with a market value of $475,000. Journalize this transaction.

Answer rating: 100% (QA)

Case A a b Case B Account name Cash Common Stock 15000 shares 10 Additional paid ... View the full answer