Pearl Holdings Inc. was incorporated on July 1, 2020 with authorized share capital of 1,000,000 common shares and 500,000 preferred shares, convertible to common shares at a rate of 10 common shares for each preferred share. The preferred shares have a $20 par/stated value.

Pearl had the following transactions related to share capital during the next few years.

Jul. 1 Issued 100,000 common shares for $4 each.

Jul. 1 Issued 5,000 preferred shares for $35 each.

Aug. 15 Issued 10,000 common shares for legal services received, valued at $25,000.

Sept. 1 Issued 5,000 common shares at $2.25 each in exchange for equipment received.

Nov. 15 Reacquired 15,000 common shares for $3 each.

Dec. 18 Converted 2000 preferred shares to common shares

Prepare journal entries.

Answer rating: 100% (QA)

To prepare the journal entries for the share capital transactions of Pearl Holdings Inc we need to a... View the full answer