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

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

Case A-Issue stock and buy the assets in separate transactions: Hampton, Inc., issued 17,000 shares of its $25 par common stock for cash of $850,000. In a separate transaction, Hampton used the cash to purchase a building for $590,000 and equipment for $260,000. Journalize the two transactions. Case B Issue stock to acquire the assets in a single transaction Hampton, Inc., issued 17,000 shares of its $25 par common stock to acquire a building valued at $590,000 and equipment worth $260,000. Journalize this transaction.