Question 1 (35 marks)

Danny Corporation was created on 1 January 2010. It is authorized to issue 20,000 shares of 6%, $40 par value preferred stock and 500,000 shares of no-par common stock with a stated value of $2 per share. The following stock transactions were completed during the first year.

Jan 10 Issued 100,000 shares of common stock for cash at $3 per share Mar 1 Issued 10,000 shares of preferred stock for cash at $55 per share April 1 Issued 25,000 shares of common stock for land. The asking price of the land was $90,000. The company's estimate of the fair market value of the land was $75,000 May 1 Issued 75,000 shares of common stock for cash at $4 per share August 1 Issued 10,000 shares of common stock for attorneys in payment of their bill for $50,000 for services provided in helping the company organize Sept 1 Issued 5,000 shares of common stock for cash at $6 per share Nov 1 Issued 2,000 shares of preferred stock for cash at $60 per share