Wonder Sales Is Authorized to Issue 100,000 Shares of $100

question 34

Essay

Wonder Sales is authorized to issue 100,000 shares of $100 par, 2% preferred stock and 1,000,000 shares of $10 par common stock.
(a) On January 2nd, Wonder Sales issues 5,000 shares of preferred stock for $107 per share and 65,000 shares of common stock at $10 per share. Journalize this issuance.
(b) On January 25th, Wonder Sales issued 250 shares of preferred stock to a Morton Law Firm for settlement of an invoice for incorporation services. The invoice was for $36,000. Journalize this issuance.
(c) On January 31st, Wonder Sales issues 500 shares of common stock to Setup Inc. for fixtures. The fixtures have a fair market value of $6,500. Journalize this issuance.

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Definitions:

State

An organized political community under one government; a nation or territory.

Promoters

Individuals or companies that undertake the preliminary activities of organizing or setting up a new business or venture.

Preincorporation Contract

An agreement made by the promoters of a company before it is legally incorporated.

Liable

Having legal responsibility or obligation.