E$11-6($Static$)$ Recording and Reporting Stockholders' Equity Transactions $[$LO $11-2,$ LO $11-4]$

Ava School of Learning obtained a charter at the start of the year that authorized $50,000$ shares of no$-$par common stock and $20,000$ shares of preferied stock, par value $$10.$ During the year, the following selected transactions occurred:

a$.$ Collected $$40$ cash per share from four individuals and issued $5,000$ shares of common stock to each.

b$.$ Issued $6,000$ shares of common stock to an outside investor at $$40$ cash per share.

c$.$ Issued $8,000$ shares of preferred stock at $$20$ cash per share.

Required:

Prepare the journal entries indicated for each of these transactions.

Prepare the stockholders' equity section of the balance sheet at December $31.$ At the end of the year, the accounts reflected net income of $$36,000.$ No dividends were declared.

Complete this question by entering your answers in the tabs below.

Prepare the journal entries indicated for each of these transactions. $($If no entry is required for a transaction$/$event$,$ select $"$No Journal Entry Required" in the first account field.$)$

Journal entry worksheet

$1$

$2$

$3$

Record the issuance to four individuals of $5,000$ shares each of common stock with no par value for a price of $$40$ per share.

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$2$ of $8$

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