Problem: Burgers & Fries, Inc. is authorized to issue 100,000 shares of common stock and 5,000 shares of preferred stock. During it's first year the business completed the following stock transaction:
July 19 issued 10,000 shares of $2.50 par common stock for cash of $6.50 per share.
Oct. 3 issued 500 shares of $1.50 no-par preferred stock for $50,000 cash.
Oct. 11 received inventory valued at $11,000 and equipment with market value of $8,500 for 3,300 shares of the $2.50 par common stock.
Required:
1. Journalize the transactions.
2. Prepare the stockholders' equity section of Burgers & Fries, Inc. Balance Sheet. The ending balance of retained earnings is a deficit of $42,000