1.

Whispering Winds Corporation, a private company following ASPE, uses a periodic inventory system. On July 1, Whispering Winds purchased $65,000 of inventory, terms 3/10, n/30, f.o.b. shipping point. Whispering Winds paid freight costs of $1,700. On July 3, Whispering Winds returned damaged goods and received a credit of $6,500. On July 10, Whispering Winds paid for the goods.

Prepare necessary journal entries for Whispering Winds

2.

Martinez Inc. was organized on January 1, 2020. It is authorized to issue an unlimited number of common shares and 108,000 preferred shares with a $8 dividend. The following share transactions were completed during the first year:

Jan.10Issued 200,000 common shares for cash at $23 per share.

Mar.1Issued 17,700 preferred shares for cash at $119 per share.

Apr.1Issued 3,000 common shares for land. The asking price for the land was $67,000; its fair value was $61,100.

May1Issued 21,500 common shares for cash at $17 per share.

Aug.1Issued 1,200 common shares to lawyers in payment of their bill of $21,600 for services rendered in helping the company incorporate.

Sept.1Issued 34,000 common shares for cash at $16 per share.

Nov.1Issued 1,600 preferred shares for cash at $122 per share.

Prepare the journal entries to record the above transactions.

3.

On January 1, 2020, Blossom Corporation granted 5,900 options to executives. Each option entitles the holder to purchase one share of Blossom's common shares at $38 per share at any time after January 1, 2022. The shares' market price is $54 per share on the date of grant, and the required service period is two years.

Prepare Blossom's journal entries for January 1, 2020, and December 31, 2020 and 2021. Assume that the options' fair value as calculated using an options pricing model is $120,000. Ignore forfeitures for simplification purposes.