Partners Meeks and Olsen wish to avoid the unlimited personal liability of the partnership form of business, so they are incorporating the company as M & O Services, Inc. The charter from Alberta authorizes the corporation to issue 15,000 shares of 7%, preferred shares and 220,000 common shares. In its first month, M & O Services, Inc. completed the following transactions:
Jan 3 Issued 6,200 common shares to Meeks and 3,700 shares to Olsen, both for cash of $12 per share.
12 Issued 1,200 preferred shares to acquire a patent with a market value of $180,000.
22 Issued 1,700 common shares to other investors for $12 cash per share.
1. Record the transactions in the journal.
2. Prepare the shareholders’ equity section of the M & O Services, Inc. balance sheet at December 31. The ending balance of Retained Earnings is $59,000.