Chavoy Corporation was organized on July 1. The company's charter authorizes 100,000 shares of $10 par value common stock. On August 1, the attorney who helped organize the corporation accepted 800 shares of Chavoy common stock in settlement for the services provided (the services were valued at $9,600). On August 15, Chavoy issued 5,000 common shares for $78,000 cash. On October 15, Chavoy issued 3,000 common shares to acquire a vacant land site appraised at $51,000. Prepare the journal entries to record the stock issuances on August 1, August 15, and October 15.

August 1

Dr Legal Expense $9,600

Cr Common stock $8,000

Cr Paid Capital $1,600

August 15

Dr Cash $78,000

Cr Common stock $50,000

Cr Paid in Capital $28,000

October 15

Dr Land $51,000

Cr Common stock $30,000

Cr Paid in Capital $21,000

Explanation:

Preparation of the journal entries to record the stock issuances on August 1, August 15, and October 15.

August 1

Dr Legal Expense $9,600

Cr Common stock $8,000

(800 shares*$10 par value)

Cr Paid Capital $1,600

($9,600-$8,000)

(To record stock issuances)

August 15

Dr Cash $78,000

Cr Common stock $50,000

(5,000shares*$10 par value)

Cr Paid in Capital $28,000

($78,000-$50,000)

(To record stock issuances)

October 15

Dr Land $51,000

Cr Common stock $30,000

(3,000shares*$10 par value)

Cr Paid in Capital $21,000

($51,000-$30,000)

(To record stock issuances)

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