Santana Rey created Business Solutions on October 1, 2015. The company has been successful, and Santana plans to expand her business. She believes that an additional $86,000 is needed and is investigating three funding sources.

[INSERT TITLE HERE] 1 Running head: [INSERT TITLE HERE] [INSERT TITLE HERE] Student Name Allied American University Author Note This paper was prepared for [INSERT COURSE NAME], [INSERT COURSE ASSIGNMENT] taught by [INSERT INSTRUCTOR'S NAME]. [INSERT TITLE HERE] 2 ACC 227: Principles of Accounting II Module 1 Homework Assignment Directions: Please use an Excel Spreadsheet to present your homework (note: if you have a Mac, you may use Pages). Accounting homework cannot be accomplished in Microsoft Word. Please use the presentations that have been provided with the course as reference. Also, you may use the Generic Working Papers Excel Workbook found in the Course Resources to complete this assignment. Please visit the Course Resources section. Please note that you may have additional written homework alongside these application assignments. Please complete the following exercises found at the end Chapter 13: Problem Set A: Problem 13-1A Problem Set B: Problem 13-2B Beyond the Numbers: BTN 13-2 Serial Problem: SP 13, Business Solutions (course-long project) COURSE-LONG PROJECT DIRECTIONS: This course contains a course-long project in which you will work on a variety of problems in regards to a computer services company called Business Solutions. Each module will build upon one another, so it is important to complete each part successfully. Please note that there are 8 total parts to the course-long project. You will have 1 week to complete each part. This course-long project is a serial problem taken from your textbook. You can view the problem starting in Chapter 13. It will continue through Chapter 25. Please use the Generic Working Papers Excel Workbook found in the Course Resources to complete this project. COURSE-LONG PROJECT: PART I (Module 1) Scenario: On October 1, 2015, Santana Rey launched a computer services company, Business Solutions, that is organized as a proprietorship and provides consulting services, computer system installations, and custom program development. Rey adopts the calendar year for reporting purposes and expects to prepare the company's first set of financial statements on December 31, 2015. Chapter 13: Serial Problem: SP 13, Business Solutions Please complete the following: Santana Rey created Business Solutions on October 1, 2015. The company has been successful, and Santana plans to expand her business. She believes that an additional $86,000 is needed and is investigating three funding sources. a. Santana's sister Cicely is willing to invest $86,000 in the business as a common [INSERT TITLE HERE] 3 shareholder. Since Santana currently has about $129,000 invested in the business, Cicely's investment will mean that Santana will maintain about 60% ownership, and Cicely will have 40% ownership of Business Solutions. b. Santana's uncle Marcello is willing to invest $86,000 in the business as a preferred shareholder. Marcello would purchase 860 shares of $100 par value, 7% preferred stock. c. Santana's banker is willing to lend her $86,000 on a 7%, 10-year note payable. She would make monthly payments of $1,000 per month for 10 years. Required Prepare the journal entry to reflect the initial $86,000 investment under each of the options (a), (b), and (c). 2. Evaluate the three proposals for expansion, providing the pros and cons of each option. 3. Which option do you recommend Santana adopt? Explain 1