On-Line Learning Corporation obtained a charter at the beginning of this year that authorized 61,000 shares of no-par common stock and 27,000 shares of preferred stock, $10 par value. The corporation was organized by four individuals who purchased a total of 32,000 shares of the common stock. The remaining shares were to be sold to other individuals. During the year, the following selected transactions occurred: a. Issued 8,000 shares of common stock to each of the four organizers for $20 cash per share. b. Sold 9,000 shares of common stock to an outside investor at $40 cash per share. c. Sold 10,000 shares of preferred stock to an outside investor at $30 cash per share. Required: 1. Prepare the journal entries for each of these transactions. 2. Is it ethical to sell stock to outsiders at a higher price than the amount paid by the organizers?