Question: Partners Pat and Quincy wish to avoid the unlimited personal

Partners Pat and Quincy wish to avoid the unlimited personal liability of the partnership form of business, so they are incorporating the company as P & Q Services, Inc. The charter from the state of Texas authorizes the corporation to issue 25,000 shares of 5%, $100 par preferred stock and 300,000 shares of no-par common stock. In its first month, P & Q Services, Inc., completed the following transactions:

Requirements
1. Record the transactions in the journal.
2. Prepare the stockholders’ equity section of the P & Q Services, Inc., balance sheet at December 31. The ending balance of Retained Earnings is $59,000.
Jan 3 Issued 6,100 shares of common stock to Pat and 3,600 shares to Quincy, both for cash of $5 per share.
12 Issued 900 shares of preferred stock to acquire a patent with a market value of $90,000.
22 Issued 1,400 shares of common stock to other investors for $5 cash per share.


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  • CreatedApril 29, 2014
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