Question Two

The real company ltd is authorized to issue 1,000,000 share of sh. 5 per value common stock and 125,000 shares of sh. 10 per preferred stock.During 2013, its first year, the company had the following stock transactions

Jan 20	Issued 400,000 shares of stock at sh. 8 per share
Feb 21	Issue 1,000 shares of preferred stocks for land having a fair market value of sh. 125,000
March 11	Issued 1,000 shares of preferred stock for cash at sh. 120 per share
June 15	Issued 100,000 shares of stock for land. The land had an asking price of sh. 900,000. The stock is currently selling on a national exchange at sh. 8.25 per share.

Required

1. Prepare journal entries to record the transactions. (8mks)

Prepare the stock holder equity section assuming the retained earnings of sh. 200,000 at December 31^st 2013.