Question

Ava School of Learning obtained acharter at the start of 2010 that authorized 55,000 shares ofno-par common stock and 21,500 shares of preferred stock, par value$14. During 2010, the following selected transactions occurred:

a.	Collected $36 cash per share from four individuals and issued 5,000shares of common stock to each.
b.	Issued 5,000shares of common stock to an outside investor at $36 cash pershare.
c.	Issued 9,500shares of preferred stock at $22 cash per share.

Requirement 1:

Give the journal entries indicated for each of these transactions.(Omit the "$" signin your response.)

Event	General Journal	Debit	Credit
a.	(Click toselect)Accounts payablePreferred stockAdditional paid-in capital,preferredDepreciation expenseCashRetained earningsCommon stockCostof goods sold
	(Click toselect)Common stockRetained earningsDepreciation expenseCost ofgoods soldAccounts payablePreferred stockCashAdditional paid-incapital, preferred
b.	(Click toselect)Accounts payableCommon stockRetained earningsAdditionalpaid-in capital, preferredAccounts receivableDepreciationexpenseCashPreferred stock
	(Click toselect)Interest expenseCashAdditional paid-in capital,preferredRetained earningsDepreciation expenseCommon stockAccountspayablePreferred stock
c.	(Click toselect)Additional paid-in capital, preferredRetainedearningsAccounts payableCost of goods soldCommon stockPreferredstockInterest revenueCash
	(Click toselect)Preferred stockCost of goods soldAccounts receivableRetainedearningsUtilities expenseAdditional paid-in capital,preferredCommon stockCash
	(Click toselect)Cost of goods soldUtilities expenseAdditional paid-incapital, preferredCommon stockCashPreferred stockAccountsreceivableRetained earnings

Requirement 2:

Prepare the stockholders' equitysection of the balance sheet at December 31, 2010. At the end of2010, the accounts reflected net income of $44,500. No dividends were declared. (Omit the "$" sign in yourresponse.)

Stockholders' Equity