QUESTION 1-1 (15 marks):

Orleans Corporation is authorized to issue an unlimited number of common shares and 2,000,000 shares of preferred shares. During 2023, its first year of operation, the company had profit of $250,000. The following share transactions occurred:

Jan 1 Paid the province $ 2,250 for incorporation fees.

Jan 15 Issued 600,000 of $ 1 cumulative preferred shares at $9 per share.

Jan 30 Lawyers for the company accepted 1,000 common shares as payment for legal services provided in helping the company incorporate. The legal services are estimated to have a value of $8,000. The shares were actively trading at $10.25 per share.

Jul 2 Issued 100,000 common shares in exchange for land. The land had an asking price of $975,000. The shares were currently selling on a provincial exchange at $10 per share.

Instructions

a) Journalize the transactions for Orleans Corporation.

b) Prepare the shareholders equity section of the balance sheet. Orleans has a December 31 year-end.