Direction: Prepare the journal entry on the part of the investor and the company issuing the shares.

Brook Company organized at the beginning or current year. The entity providorl the following tran8uct'onts nffecting shareholders' equity: 1. entity Was authorinyi to iggu._' share capital as follows: 3. 5. 6. 7. S. Preference share capital. P100 par, 30.000 shores Ordinary share capital, P50 par value, 100,000 shares 40.000 ordinary shares of were issued for cash at P6() per share. 10,000 preference shares were issued at P 120 for cash. 10.000 preference shares were subscribed at par value. P 400, 000 was received On the above subscription to preference shares. 1.000 preference shares Were issued in payment of legal fees of P 100,000 in connection with organizing the corp ora tion. 20,000 ordinary shares were issued for property, plant and equipment which had a fair value of P 1,300,000. 15.000 ordinary shares were subscribed for at par. 9, Forty percent Of the ordinary share capital subscription was collected. 10. The balance owing on the subscription described in i and 5 was collected, and the preference shares were issued. 11.. The net income for the current year was P'2.OOO.OO().