Partners Meeks and Olsen wish to avoid the unlimited personal liability of the partnership form of business, so they are incorporating the company as M & O Services, Inc. The charter from the state of Texas authorizes the corporation to issue 15,000 shares of 7%, $150 par preferred stock and 220,000 shares of no-par common stock. In its first month, M & O Services, Inc., completed the following transactions:

Requirements

1. Record the transactions in the journal.
2. Prepare the stockholders’ equity section of the M & O Services, Inc., balance sheet at December 31. The ending balance of Retained Earnings is $59,000.

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Jan 3 Issued 6,200 shares of common stock to Meeks and 3,700 shares to Olsen, both for cash of $12 per share. 12 Issued 1,200 shares of preferred stock to acquire a patent with a market value of $180,000. 22 Issued 1,700 shares of common stock to other investors for $12 cash per share.