Partners Dempsey and Perry wish to avoid the unlimited personal liability of the partnership form of business, so they are incorporating the company as D & P Services, Inc. The charter from the state of Texas authorizes the corporation to issue 10,000 shares of 6%, $100 par preferred stock and 250,000 shares of no-par common stock. In its first month, D & P Services, Inc., completed the following transactions:

Requirements 1. Record the transactions in the journal.

2. Prepare the stockholders’ equity section of the D & P Services', Inc., balance sheet at December 31. The ending balance of Retained Earnings is $40,000.

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Jan 3 Issued 6,300 shares of common stock to Dempsey and 3,800 shares to Perry, both for cash of $10 per share. 12 Issued 1,100 shares of preferred stock to acquire a patent with a market value of $110,000. 22 Issued 1,500 shares of common stock to other investors for $10 cash per share.