Jamaica Corp. organized on June 1,2020, was authorized to issue shares as follows: 9%, 800,000, P100 par, convertible preference shares2,000,000, P2.50 par value, ordinary sharesDuring the remainder of the fiscal year ended May 31,2021, the following transactions were completed in the order given:240,000 preference shares were subscribed for at P105, and 720,000 ordinary shares were subscribed for at P26. Both subscriptions were payable 30% upon subscription, the balance in one payment.The second subscription payment was received, except one subscriber for 48,000 ordinary shares defaulted on payment. The full amount paid by this subscriber was returned, and all of the fully paid shares was issued.120,000 ordinary shares were reacquired by purchase at P28.Each preference share was converted into four ordinary shares.The treasury shares were exchanged for machinery with a fair value market value of P3,440,000.There was a 2 for 1 split and the par value of the new ordinary shares is P1.25.Profit was P664,000. Assume the revenue and expenses have been closed to a temporary account. Income SummaryWhat are the journal entries of the above transactions?Prepare the stockholders equity for 2021

Every company in order to raise its capital, issues the shares like equity or preference where these…

Answered: Jamaica Corp. organized on June 1,2020,…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Jamaica Corp. organized on June 1,2020, was authorized to issue shares as follows:

9%, 800,000, P100 par, convertible preference shares
2,000,000, P2.50 par value, ordinary shares

During the remainder of the fiscal year ended May 31,2021, the following transactions were completed in the order given:

240,000 preference shares were subscribed for at P105, and 720,000 ordinary shares were subscribed for at P26. Both subscriptions were payable 30% upon subscription, the balance in one payment.
The second subscription payment was received, except one subscriber for 48,000 ordinary shares defaulted on payment. The full amount paid by this subscriber was returned, and all of the fully paid shares was issued.
120,000 ordinary shares were reacquired by purchase at P28.
Each preference share was converted into four ordinary shares.
The treasury shares were exchanged for machinery with a fair value market value of P3,440,000.
There was a 2 for 1 split and the par value of the new ordinary shares is P1.25.
Profit was P664,000. Assume the revenue and expenses have been closed to a temporary account. Income Summary

What are the journal entries of the above transactions?

Prepare the stockholders equity for 2021

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