Question

Max Corp. was organized on January 1, 2012. It is authorized to issue 250,000 shares of 8%, $110 par value preference shares, and 900,000 shares of ordinary shares with a par value of $4 per share. Journalize the following share transactions that were completed during the first year: Transaction Feb. 1 Issued 50,000 ordinary shares for cash at $7 per share. Date Joumal Entry Mar 2 Issued 14,000 ordinary shares to lawyer in payment of their fees of $70,000 for services rendered in helping the company organize. Joumal Entry April 15 Issued 30,000 ordinary shares for cash at $5 per share. Joumal Entry June 16 Issued 25,000 preference shares for cash at $130 per share Joumal Entry June 20 Issued 25,000 ordinary shares for Equipment. The asking price of the equipment was $130,000; the fair value of the equipment was $95,000. Journal Entry

Answer 1

Date	Transactions	Debit $	Credit $
Feb 1	Cash ($7 X 50000 shares)	35000
	Common stock ($4 X 50000 shares)		20000
	Additional paid in capital($3 X 50000 shares)		15000
March 2	Legal fee expenses	70000
	Common stock($4 X 14000shares)		56000
	Additional paid in capital($70000-$56000)		14000
April 15	Cash ($5 X 30000 shares)	150000
	Common stock ($4 X 30000 shares)		120000
	Additional paid in capital($1 X 30000)		30000
June 16	Cash ($130 X 25000 shares)	3250000
	Preferred stock ($110 X 25000)		2750000
	Additional paid in capital ($20 X 25000 shares)		500000
June 20	Equipment(Fair value)	95000
	Additional paid in capital ($100000-$95000)	5000
	Common stock($4 X $25000)		100000

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