SP $11$ Serial Problem Business Solutions $($Algo$)$ LO P$1,$ C$1,$ C$2$

Santana Rey created Business Solutions on October $1,2021.$ The company has been successful, and Santana plans to expand her

business. She believes that an additional $$100,000$ is needed and is investigating three funding sources.

a$.$ Santana's sister Cicely is willing to invest $$100,000$ in the business as a common shareholder. Because Santana hare

about $$150,000$ invested in the business, Cicely's investment will mean that Santana will maintain about $60\%$ ownership and

Cicely will have $40\%$ ownership of Business Solutions.

b$.$ Santana's uncle Marcello is willing to invest $$100,000$ in the business as a preferred shareholder. Marcello would purchase $1,000$

shares of $$100$ par value, $9\%$ preferred stock.

c$.$ Santana's banker is willing to lend her $$100,000$ on a $9\%,11-$year note payable. She would make monthly payments of $$1,196$ for

$11$ years.

Required:

Prepare the journal entry to reflect the initial $$100,000$ investment under each of the options $a,b,$ and $c.$

$1$ Record the issue of common stock of $$100,000$ cash.

$2$ Record the issue of preferred stock of $$100,000$ cash.

$3$ Record the issue of a note for $$100,000$ loan from the

bank.

Note : $=$ journal entry has been entered