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Lump sum issuance of par value shares Chile Corp issued 2,000 common shares and 400 preferred shares to an investor for $72,000 cash. Instructions a)Prepare

Lump sum issuance of par value shares

Chile Corp issued 2,000 common shares and 400 preferred shares to an investor for $72,000 cash.

Instructions

a)Prepare the journal entry forthe issuance, assuming the par value of the common shares was $5 and the market value was $30, and the par value of the preferred shares was $40 and the market value was $50

b)Prepare the journal entry for the issuance, assuming the same facts as a except the preferred shares have no ready market and the common shares have a market value of $24

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