In 2022, Chadd has authorized 220,000 common shares and 65,000 preferred shares. The preferred shares will be

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In 2022, Chadd has authorized 220,000 common shares and 65,000 preferred shares. The preferred shares will be cumulative and pay $5 dividends. The 140,000 shares issued were issued to Chadd. He will maintain control of the company and sit on the board of directors. 220000 65000 5 140000 Transactions during 2023 a) On January 1, Gescan purchased a strategic investment of 28,000 shares in HSBC Inc. for $12 per share. This represents 32% of HSBC Inc. common shares. On December 31, HSBC Inc. declares and pays a $142,000 dividend and reports a net income of $332,000. Gescan will use the equity method to record this investment. 28000 12 32 142000 332000 HSBC Inc. b) On January 1, Chadd has located a few private investors that wish to purchase shares in the new corporation. Some want common shares, while other are interested in preferred shares. Gescan Electric Inc. issued 62,000 common shares for $248,000 cash and issued 18,000 preferred shares for $72,000 cash. 62000 248000 18000 72000 c) On March 1, Gescan Electric Inc. issued and sold $312,000, 7 year bonds with an interest rate of 9%. The market rate at the time of issue was 10%. Any premium or discount on the bond is amortized using the effective interest rate method. Interest will be paid annually on February 28. The Present value of 1 and annuity of 1 of 10% for 6 periods are 0.5132 and 4.8684, respectively. Use a 4 decimal factor for the bond calculation. 312000 7 10 0.5132 160118 4.8684 136705 296823 d) On April 1, the company has extra cash on hand and would like to invest it in short-term bonds issued by Fargo Ltd. The company bought 33, $3,200 short term (one-year) bonds at par on this date and intended to sell these bonds before maturity. The interest rate on the bond is 10%, payable annually at March 31. On December 31, 2023, each bond was trading in the market at $3,840. On January 1, 2024, all bonds were sold for $100,320. Prepare Journal Entries.