Reference no: EM132772599

Problem 1: Journal Entries of the following transactions:

Shaky Holdings Inc. is authorized to issue 20 000 convertible preferred shares with a par value of $10 and an unlimited number of no par value common shares. The preferred shares can be converted into common shares at a ratio of 1:3.

1. Issued 10 000 preferred shares at par value.
2. Exchanged 1 000 common shares for a computer valued at $1 240.
3. Our legal fees for our organizational costs were $1 200. We issued 120 shares of preferred stock to our lawyers.
4. We sell 20 000 shares of common stock for $1.40 per share.
5. We sell 1 000 shares of preferred stock at $12 each.
6. We purchase 1 200 of our preferred shares back at par value.
7. One of our shareholders exercises their option and converts 1 000 preferred shares for common stock.
8. Executed a 2 for 1 common stock split.