Evaluate the three proposals for expansion

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Adria Lopez created success systems on october 1, 2013. The company has been succesful and adria plans to expand her business. She believes that an additional $86,000 is needed and is investigating three funding sources.

Adrias sisyste cicely is willing to investing $86,000 in the business as common shareholder. Since Adria currently has about $129,000 invest in the business. Cicelys investment will mean that Adrian will mainain about 60% ownership and Cicely will have 40% ownership of success systems.

Adria uncles Marcello is willing to invest $86,000 in the business as prefered shareholder. Marcello would purchase 860 shares of $100 per value, 7% prefered stock.

Adria banker is willing to lend her $86,000 on 7%, 10 year note payable. She would make monthly payments of $1,000 per month for 10 years.

Prepare the journal entry to reflect the intial $86,000 investment under each of the options, a,b,c.

Evaluate the three proposals for expansion, providing the pros and cons of each option.

Which option do you recommend Adria adopt. Explain

Reference no: EM131464938

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