The partners who own Liard Canoes Co. wished to avoid the unlimited personal liability of the partnership form of business, so they incorporated as Liard Canoes, Inc. The charter from the state of Texas authorizes the corporation to issue 5,000 shares of $1 no-par preferred stock and 140,000 shares of $5 par common stock. In its first month, Liard Canoes completed the following transactions: Jan 6 Issued 500 shares of common stock to the promoter for assistance with issuance of common stock. The promotional fee was $7,500. Debit Organization Expense. 9 Issued 9,000 shares of common stock to Lou Liard and 10,000 shares to Larry Liard in return for cash equal to the stock’s market value of $15 per share. The Liard’s were partners in Liard Canoes, Inc. 10 Issued 600 shares of preferred stock to acquire a patent with a market value of $12,000. 26 Issued 1,400 shares of common stock for $15 cash per share. Requirements 1. Record the transactions in the journal. 2. Prepare the stockholders equity section of the Liard Canoes, Inc., balance sheet at January 31. The ending balance of Retained Earnings is $56,000.
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