Reference no: EM133023969

Question - Accounting Principles Exercises - Nevada Corporation was created on January 2, 2019. The articles of incorporation from the Government of Canada authorize Nevada Corporation to issue an unlimited number of common shares and 500,000 shares of $0.50 preferred shares. The company had the following transactions:

2019

Jan. 2 Issued (sold) 5,000 common shares to the corporation's legal firm for incorporating the business. The total legal fee was $5,000.

Jan. 3 Issued (sold) 200,000 common shares for cash at $1 per share.

Jan. 4 Issued (sold) 10,000 preferred shares for cash at $10 per share.

Jan. 4 Issued 200,000 common shares for $210,000 for a building with a market value of $260,000.

Required -

I. Journalize the above transactions.

II. December 31, close Income Summary to Retained Earnings assuming that Nevada had $63,000 of net income for the year.