S Corporation got a charter granting the right to issue 100000 ordinary shares of Taka 10 par value and 8%, 50000 preferred shares of Taka 50 par value.

 The following transactions involving the issurance of shares were completed

i) Issued 80000 shares of common stock for cash at 15 per share. 

ii) Issued 10000shares of preferred stock at Taka 58 per share

iii) Issued 500 ordinary shares for machinery. The machinery had been appraised at Taka 7100; the seller's book value was Taka 6200. The most recent market price of the ordinary shares is Taka 16 a share.

iv) Issued 375 ordinary shares and 100 preference shares for a lump sum amounting to Taka 10800. The ordinary had been selling at Taka 14 and the preference at Taka 65.

 v) The company declared 10% common stock dividend and declared the preferred dividend

Required: Journalize the above transactions. Prepare a shareholder's equity section for S corporation based on the above transactions. Assume the retained earnings has a credit balance of 1000000 Taka.

Answer rating: 100% (QA)

Journal Entries i Cash Account Dr 1200000 Common Stock Account Cr 1200000 80000 shares Taka 15 per s... View the full answer