Dave M. Company issues 500 shares of $10 par value Common Stock and 100 shares of $40 par value Preferred Stock as a basket for a lump sum of $105,000. Total transaction costs paid to complete the sale was $5,000. Common Stock of the company was selling for $198 per share in the market that day and Preferred Stock was selling for $110 per share in the market that day.

1. Prepare a table showing how the sale price is allocated between the Common Stock and the Preferred Stock.

2. Prepare the journal entry to record the basket sale of the two stocks.