Essential Financial Service Corp. was incorporated on January 1, 2016 to prepare business plans for small enterprizes seeking bank financing.
Required: Prepare journal entries to record the following transactions on January 2, 2016:
1. Received an incorporation charter authorizing the issuance of an unlimited number of no par-value common shares and 10,000, 4% preferred shares.
2. Issued in exchange for incorporation costs incurred by shareholders 10,000 common shares at $1.
3. Issued for cash 1,000 preferred shares at $3 each.