This short exercise demonstrates the similarity and the difference between two ways to acquire plant assets.
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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 BRecord debits first, then credits. Exclude explanations from any journal entries.
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Case Issue stock and buy the assets in separate transactions:
Ashley Company issued shares of its $ par common stock for cash of $ In a
separate transaction, Ashley used the cash to purchase a building for $ and equipment for $
Journalize the two transactions.
Case Issue stock to acquire the assets in a single transaction:
Ashley Company issued shares of its $ par common stock to acquire a building with a market value of
$ and equipment with a market value of $ Journalize this transaction.
