Prepare the journal entry

PART II Razul took the proceeds from dissolving the partnership and purchased a corporation selling electrical parts used for large production companies. He employs several people, but is looking to expand his operations further. In addition to expanding the sales of electrical parts, he also wants to start selling heating, ventilation and air conditioning (HVAC) parts and machinery through a separate division of the company called 'HVAC Parts & Machinery.' Currently, Razul owns all the shares in the corporation. To raise the needed cash, he decides to offer common and preferred shares for sale to investors starting in 2021. Below is the balance sheet at the end of 2020. Holister Electric Inc. Balance Sheet As at December 31, 2020 Assets Liabilities Cash $25,000 Accounts Payable $12,200 Accounts Receivable 13,500 Unearned Revenue 5,200 Prepaid Insurance 3,600 Bank Loan 26,000 Inventory 72,000 Total Liabilities 43,400 Property, Plant & Equipment 210,000 Shareholders' Equity Accumulated Depreciation -25,000 Common Shares - issued 90,000 Retained Earnings 165,700 Total Shareholder's Equity 255,700 Total Assets $299,100 Liabilities & Owner's Equity $299,100 Bazul has authorized 150,000 common shares and 10,000 preferred shares. The preferred shares will be cumulative and pay $5 dividends. Razul wants to keep control of his business, so he will keep his 90,000 common shares and will sit on the board of directors. Razul 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. On January 1, 2021, Razul issues 30,000 common shares for $75,000 cash and issues 3,000 preferred shares for $12,000 cash.[In March 1, 2021, WElectric Inc. issued and sold $150,000, m bonds with an interest rate of 2%. 111E market rate at the time of issue was 396. Any premium or discount on the bond is amortized using the effective interest rate method. Interest will be paid annually on February 23. Use a idecimalfactor for the bond calculation. Du ring 2021, the company has performed well, so the board of directors decided to pay dividends. On November 30, 2021, the company declared cash dividends of $50,000, which will be paid out on December 15, 2021. Use the cash dividends method and close cash dividends at the end of the year. During the year, WElectrc made the following investments: a} On January 1, Wpurchased a strategic investment of 12,000 shares in Gregor inc. for $11 per share. This represents 40% of Gregor inc. common shares. (In December 31, Gregor Inc. declares and pays a $50,000 dividend and reports a net income of $100,000. mum will use the equity method to record this inmtmenl'. b] [In April 1?, they purchased a $20,000, MTbili at 4% for $19,304. The Tbill matur on July 16. c] On July 1, they purchased a $50,000, Egg bond paying 6% when the market rate was 39%. Interest is paid every 5 months on December 31 and June 30. Holister paid $45,945 to purchase the bond and plans to hold onto the bond until it matures. d] Gn November 25, the company purchased 2,000 shares of Daenerys Inc. at 519 per share for the purpose of trading. The shar are less than 4% of the total shares of Daenerys Inc. and are a non-strategic investment. By December 31, the price per share had gone up to 522 per share. Prepare the jou rnai entries for the issue of shares, issue of the bonds and the dividends, plus all the investmenE made during the year. Also prepare adjustments at year end to accrue interest on the bond and to record change to any applicable investments. {39 marks]