The articles of incorporation from the province of Ontario authorize Challenger Canoes Inc. to issue 10,000 shares of \(\$ 6\) preferred shares and 100,000 common shares. In its first month, Challenger completed the following transactions:

{Requirements}
1. Record the transactions in the journal.
2. Prepare the shareholders' equity section of the Challenger balance sheet at October 31, 2020. The ending balance of Retained Earnings is \(\$ 49,000\).

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2020 Oct. 6 Issued 300 common shares to the lawyer for assistance with chartering the corporation. The lawyer's fee was $1,500. Debit Organization Expense. 9 Issued 9,000 common shares to Jerry Spence and 12,000 shares to Sheila Markle in return for cash equal to the shares, market price of $5 per share. Spence and Markle are executives of the company. 10 Issued 400 preferred shares to acquire a patent with a fair value of $40,000. 26 Issued 2,000 common shares for cash of $12,000.