Problem 1: Fullhouse Company began operations on January 1, 2013. Authorized were 100,000 ordinary shares of P100 par value and 50,000 convertible preference shares of 10% P100 par value. The following transactions involving shareholders equity occurred during the first year of operations.

January 1 Issued 10,000 ordinary shares to the promoters in exchange for land valued at P2,500,000 and services valued at P500,000. The property had cost the promoters P1,800,000 three years before and was carried on their books at P1,500,000

February 20 Issued 15,000 preference shares for P120 per share. Each share can be converted to 5 ordinary shares. The entity paid P50,000 to an agent for selling the shares

March 10 Sold 25,000 ordinary shares for P260 per share. Issue costs amounted to P200,000

April 1 Sold 20,000 ordinary shares under share subscriptions at P350 per share. No share certificates are issued until a subscription contract is paid in full. No cash was received.

July 15 Exchanged 12,000 ordinary shares and 20,000 preference shares for a building with a fair value of P7,000,000. The building was originally purchased for P6,500,000 by the owner and has a carrying amount of P4,800,000. In addition, 10,000 ordinary shares were sold for P3,000,000 on the same date.

August 1 Received payments in full for half of the share subscriptions and partial payments on the rest of the subscriptions. Total cash received was P4,500,000. Share certificates were issued for the subscriptions paid in full.

August 31 Received notice form holders of share subscriptions for 5,000 shares that they would not pay further on the subscriptions because the price of the share had fallen to P190 per share. The amount still due on those contracts was P1,500,000. Amounts previously paid on the contracts are forfeited according to the agreement

December 31 Net Income for the first year of operations was P3,000,000.

Required: Prepare journal entries to record the preceding transactions.