Moosonee Ltd. was incorporated as a private company on January 2, 2018, and is authorized to issue an unlimited number of common shares and $1 preferred shares. The company had the following share transactions in its first month of operations:
Jan. 6 Issued 200,000 common shares for $1.50 per share.
12 Issued 50,000 common shares for $1.75 per share.
17 Issued 10,000 preferred shares for $25 per share.
18 Issued 500,000 common shares for $2 per share.
24 Reacquired 200,000 common shares at $1.90 per share.
31 Issued 10,000 common shares in exchange for $15,000 of legal services.
Instructions
(a) Record the above transactions.
(b) What is the number and average cost of the preferred and common shares at the end of January?
(c) If Moosonee were a publicly traded company, how might the journal entry to record the noncash transaction on January 31 change?