Reference no: EM132815507

Corporation: Formation and Share Capital Transactions Problem - The Fernandez Corporation was incorporated on September 1, 2021 and was authorized to issue share capital as follows:

200,000 shares of no-par ordinary share

5,000 shares of 6% preference share at a par value of 200

The following share capital transactions took place in the months of September and October 2021.

a. On September 14, subscriptions were received for the authorized ordinary shares at 30 per share on the following terms: 25% down in cash at the date of subscription, the balance is payable in three equal installments due on October 15, November 15 and December 15.

b. On September 18, all of the preference shares are sold for cash at 220 per share. Transaction costs of 5,000 were incurred and paid.

c. On October 15, the corporation collected the first installment of the subscription in (a).

Required -

(a) Journal entries to record the above transactions.

(b) Shareholders' equity section of the statement of financial position as of October 31, 2021.