Ava School of Learning obtained a charter at the start of the year that authorized 50,000 sharesof no-par common stock and 20,000 shares of preferred stock, par value $10. During the year, thefollowing selected transactions occurred:a. Collected $40 cash per share from four individuals and issued 5,000 shares of common stockto each.b. Issued 6,000 shares of common stock to an outside investor at $40 cash per share.c. Issued 8,000 shares of preferred stock at $20 cash per share.Required:1. Give the journal entries indicated for each of these transactions.2. Prepare the stockholders’ equity section of the balance sheet at December 31. At the end ofthe year, the accounts reflected net income of $36,000. No dividends were declared.
Ava School of Learning obtained a charter at the start of the year that authorized 50,000 shares
of no-par common stock and 20,000 shares of
following selected transactions occurred:
a. Collected $40 cash per share from four individuals and issued 5,000 shares of common stock
to each.
b. Issued 6,000 shares of common stock to an outside investor at $40 cash per share.
c. Issued 8,000 shares of preferred stock at $20 cash per share.
Required:
1. Give the
2. Prepare the
the year, the accounts reflected net income of $36,000. No dividends were declared.
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