Halpern Corporation is authorized to issue 1,000,000 shares of $3 par value common stock. During 2018, its first year of operation, the company has the following stock transactions. Jan.1 Paid the state $5,000 for incorporation fees.
Jan.15 Issued 500,000 shares of stock at $6 per share.
Jan.30 Attorneys for the company accepted 500 shares of common stock as payment for legal services rendered in helping the company incorporate. The legal services are estimated to have a value of $7,000.
July2 Issued 100,000 shares of stock for land. The land had an asking price of $900,000. The stock is currently selling on a national exchange at $8 per share.
Sept.5 Purchased 15,000 shares of common stock for the treasury at $8 per share.
Dec.6 Sold 11,000 shares of the treasury stock at $11 per share.

Required:
Journalize the transactions for Halpern Corporation.

Answer and Explanation:

The Journal entries are shown below:-

1. Organization Expenses Dr, $5,000  

    To Cash $5,000

(Being  Organization Expenses is recorded)

2. Cash Dr, $3,000,000 (500,000 × $6)

     To Common Stock $1,500,000 (500,000 × $3)

     Paid-In Capital in Excess of Par-Common Stock $1,500,000

(Being cash is recorded)

3. Organization Expenses Dr, $7,000

     To Common Stock $1,500 (500 × $3)

     Paid-In Capital in Excess of Par-Common Stock $5,500

(Being paid in capital in excess is recorded)

4. Land Dr, $800,000 (100,000 × 8 )

          To Common Stock $300,000 (100,000 × $3)

    To Paid-In Capital in Excess of Par-Common Stock $500,000

(Being land is recorded)

5. Treasury Stock Dr, $120,000 (15,000 × $8)

        To Cash $120,000

(Being treasury stock is recorded)

6. Cash Dr, $121,000 (11,000 × $11)

    To Treasury Stock $88,000 (11,000 × $8)

    To Paid-In Capital from Treasury Stock $33,000

(Being cash is recorded)

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