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:
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.