This short exercise demonstrates the similarity and the difference between two ways to acquire plant assets.

LOADING... $($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?

Question content area bottom

Part $1$

Journalize the transactions for cases A and B$.($Record debits$$ first, then credits. Exclude explanations from any journal$$ entries.$)$

$$Let$\text{'}$s begin with case A$-$ Record the issuance of the common stock.

Journal Entry

Accounts

Debit

Credit

Cash

Common Stock

Paid$-$in Capital in Excess of Par$$Common

Part $2$

Case A$-$ Record the purchase of the building and equipment.

Journal Entry

Accounts

Debit

Credit

Part $3$

Case B$-$ Record the issuance of the common stock to acquire assets.

Journal Entry

Accounts

Debit

Credit

Part $4$

Compare the balances in all accounts after making both sets of entries. Are the account balances similar or$$ different?

The account balances are

$$

different

the same

$.$

The account balances are.

Calculator

Time Remaining: $00$:$13$:$10$

Next

pop$-$up content starts

More info

Case A$-$ Issue stock and buy the assets in separate$$ transactions:

AshleyAshley Company issued $17$ comma $00017,000$ shares of its $ $35$$$35$ par common stock for cash of $ $650$ comma $000$$$650,000.$ In a separate$$ transaction, AshleyAshley used the cash to purchase a building for $ $510$ comma $000$$$510,000$ and equipment for $ $140$ comma $000$$$140,000.$ Journalize the two transactions.

Case B$-$ Issue stock to acquire the assets in a single$$ transaction:

AshleyAshley Company issued $17$ comma $00017,000$ shares of its $ $35$$$35$ par common stock to acquire a building with a market value of $ $510$ comma $000$$$510,000$ and equipment with a market value of $ $140$ comma $000$$$140,000.$ Journalize this transaction.