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Question - Settlers of Catan Co is authorized to issue an unlimited number of common shares and 10,000 preferred shares. During its first year, the business completed the following share issuance transactions:
July 19: Issued 10,000 common shares for cash of $6.50 per share.
Oct 3: Issued 500, $1.50 preferred shares for $50,000 cash.
Oct 11: Received inventory valued at $11,000 and equipment with fair value of $8,500 for 3,300 common shares.
Required -
1. Journalize the transactions. Explanations are not required.
2. Prepare the shareholders' equity section of Settlers of Catan Co's balance sheet. The ending balance of Retained Earnings is a deficit of $42,000.
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