P10-76A. (Learning Objective 2: Recording corporate transactions and preparing the shareholders’ equity section of the Balance Sheet) Cullen Canoes’ constitution authorizes the corporation to issue 10,000 no-par preference shares and 80,000 shares of $8 par ordinary shares. In its first month, Cullen Canoes completed the following transactions:

Requirements 1. Record the transactions in the journal.
2. Prepare the shareholders’ equity section of the Cullen Canoes, Inc., Balance Sheet at May 31.
The ending balance of Retained Earnings is $56,000.

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May 6 9 10 26 Issued 900 ordinary shares to the promoter for assistance with issuance of the ordinary share. The promotional fee was $22,500. Debit Organization Expense. Issued 10,000 ordinary shares to Ben Cullen and 12,000 shares to Bill Cohen in return for cash equal to the share's market value of $25 per share. The Cullens were partners in Cullen Canoes Co. Issued 800 shares of preference share to acquire a patent with a market value of $20,000. Issued 1,000 shares of ordinary share for $25 cash per share.