Ben and Eric are opening a comic bookstore to be registered as E&B comic Bookstore Co. The owners are desirous of comparing several financial transactions and possible outcomes to assist in guiding their decisions-making process. They assume that the company will be formed on January 1,2020. in addition, E&B Comic Bookstore Company's stock (to be divided into two classes 700,000 shares Class A- voting rights and 500,000 shares Class B - non-voting rights) and 400,000,$X par value (see info below). 5% cumulative preferred stock. they have 

asked you to prepare the Company's journal entries and statement of owner's equity based on the following information below:

A) issued 60% of authorized shares of class A common stock. stock has par value of $48.00 per share and was issued at $105.00 per share.

B) Issued 60% of authorized shares of non-par class B stock. issue price $98.00

C) Issued 20% of authorized shares of preferred stock at par value, $168.00

D) Exchanged 40% of authorized shares of class A common stock for Office Furniture and equipment with an appraised value of $4000,000.00 and Motor Truck with an appraised value of $10,000,000.00.

E) Earned Net Income $1,450,000.00

F) Declared interim dividends for preferred share holders as well as $80 per share to common stockholders.
Using the information above as a guide:

A) Prepare the journal entries with narrations to record the following:

•The issuances of stock.

•Close out net Income to retained earnings.

•Dividend declared.

•Close out dividend to retained earnings.

B) Prepare the Company's Stockholders equity section of the balance sheet at December 31, 2020 (HINT) The following information must be clearly stated/shown:

•Information on par or par value for all classes of shares which must he shown separately.

•The number of shares authorized and issued where necessary.

•The sub total for the total paid in capital.

•Retained earning.

•Total stockholders' equity.

Answer rating: 100% (QA)

Solution iven futhoofsed shares class A Too0o0 shanes 48 ax value closs B 5000o shanes 98 issue rice ... View the full answer