GHI Corporation, a distributor of various beauty products, was authorized to issue 10,000 6%, P100 par preference shares and 40,000 P50 par ordinary shares. During its first year of operations, it engaged in the following selected transactions:

January 5	Issued 10,000 ordinary shares at par for cash.
January 15	Issued 2,500 preference shares at par for cash.
February 10	Paid P6,000 cash for costs incurred in forming and organizing a corporation.
February 20	Received subscription to 20,000 ordinary shares at P60 per share together with the 40% down payment.
March 25	Received subscription to 4,000 preference shares at P105 per share together with the 40% down payment.
August 20	Received 20% of the subscription price on Feb 20 transaction.
September 25	Received the balance of the subscription price in March 25 transaction and issued the stock certificate.
October 10	Issued 4,000 ordinary shares for equipment with a fair value of P240,000.
December 31	Closed the P300,000 credit balance of the income summary to retained earnings.

Required:

A. Prepare journal entries to record the above transactions.

B. Prepare the stockholder’s equity section as of December 31, 2018.

Answer rating: 100% (QA)

Answer A Entries are as follow Date Particulars Debit P Credit P 10Feb Preliminary Expense Bank 20F... View the full answer