Diego Corp Received Its Charter and Began Business in 2020

question 82

Essay

Diego Corp received its charter and began business in 2020.The company was authorized to issue 20,000,$5,noncumulative preferred shares and an unlimited number of common shares.Prepare journal entries to record the following transactions that occurred during 2020:
$\begin{array}{|l|l|}\hline \text { Sep-01 } & \begin{array}{l}\text { Honoured a } \$ 55,000,12 \%, 120 \text { note payable, in exchange for } 800 \text { preferred } \\\text { shares. }\end{array} \\\hline \text { Oct-12 } & \text { Sold 1,500 preferred shares for } \$ 70 \text { per share, cash } \\\hline \text { Nov-03 } & \text { Sold 2,000 common shares at } \$ 22 \text { per share. } \\\hline\end{array}$

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Definitions:

Raw Materials

Basic substances in their natural, modified, or semi-processed state, used as inputs to a production process for subsequent modification or transformation into finished goods.

Direct Labor

The workforce directly involved in product manufacturing, whose labor is easily traced to the product itself.

Wages of Supervisors

Compensation paid to individuals who oversee and manage the work of others within an organization.

Bottlers

Companies or individuals engaged in the process of packaging beverages, most commonly soft drinks or alcoholic beverages, for distribution and sale.