Burgers & Fries, Inc., is authorized to issue an unlimited number of common shares and 10,000 preferred shares. During its first year, the business completed the following share issuance transactions:
July 19 Issued 10,000 common shares for cash of $6.50 per share.
Oct. 3 Issued 500 $1.50 preferred shares for $50,000 cash.
11 Received inventory valued at $11,000 and equipment with fair value of $8,500 for 3,300 common shares.
Requirements
1. Journalize the transactions. Explanations are not required.
2. Prepare the shareholders' equity section of Burgers & Fries' balance sheet. The ending balance of Retained Earnings is a deficit of $42,000.