3

In order to encourage employee ownership of the company's $1 par common shares, Washington Distribution permits any of its

employees to buy shares directly from the company through payroll deduction. There are no brokerage fees and shares can be

purchased at a 10% discount. During March, employees purchased 35,000 shares at a time when the market price of the shares on the

New York Stock Exchange was $16 per share.

1.75

points

02:34:48

eBook

B

Hint

Print

References

Required:

Prepare the appropriate journal entry to record the March purchases of shares under the employee share purchase plan.

Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.

View transaction list

No

1

Event

1

View journal entry worksheet

Cash

General Journal

Compensation expense

Common stock

Paid-in capital - excess of par

Debit

504,000

56,000

Credit

35,000

525,000

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