Chapter 11 Corporate Reporting and Analysis LEM (This serial problem began in Chapter 1 and continues through most of the book. If previous chaper ments were not completed, the serial problem can begin at this point.) SP 11 Santana Rey created Business Solutions on October 1, 2017. The company has been succes and Santana plans to expand her business. She believes that an additional $86,000 is needed and is in tigating three funding sources. a. Santana's sister Cicely is willing to invest $86,000 in the business as a common shareholder. Sins Santana currently has about $129,000 invested in the business, Cicely's investment will mean tu Santana will maintain about 60% ownership and Cicely will have 40% ownership of Bates Solutions. b. Santana's uncle Marcello is willing to invest $86,000 in the business as a preferred shareholdex Marcello would purchase 860 shares of $100 par value, 7% preferred stock. C. Santana's banker is willing to lend her $86,000 on a 7%, 10-year note payable. She would mak monthly payments of $1,000 per month for 10 years. Required 1. Prepare the journal entry to reflect the initial $86,000 investment under each of thie options (a.(u 2. Evaluate the three proposals for expansion, providing the pros and cons of each oes RF and (c). 3. Which option do you recommend Santana adopt? Explain The following General Ledger assignments highlight the impact, or lack thereof. ox Girancial sale ments from equity-based transactions. GL 11-1 General Ledger assignment 11-1 is adapted from Problem 11-2A, including Segining a uity balances. Prepare journal entries related to treasury stock, cash dividends, and net income. Then prepare the statement of retained earnings and the stockholders' equity section of the balance sheet GL 11-2 General Ledger assignment 11-2 is adapted from Problem 11-4A, including beg ending equity balances. Prepare journal entries related to cash dividends and stock dividen the number of shares outstanding, the amount of net income, and the amount of retained