After incorporation on January 15, 2017, the only share capital issued by the privately-owned Sarasota Corporation...

After incorporation on January 15, 2017, the only share capital issued by the privately-owned Sarasota Corporation is 1,000 common shares issued at $10 each. Sarasota reports under IFRS although it is allowed to follow ASPE. Other activity related to shareholder's equity is outlined below.

June 12 Issued 41,000 common shares for cash at $15 per share.
June
30 Issued 1,600 common shares to a law firm in settlement of their bill for $27,230. (Use Professional Fees Expense) On June 30, the shares had a fair value of $14 each.
July
11 Issued 1,400 preferred shares for $42 per share. Each share was convertible into 7 common shares.
Oct.
1 Issued 5,500 common shares in exchange for land. The common shares were trading at $13 per share on that date. The land's fair value was estimated to be $72,100.
Nov.
15 Issued 1,600 preferred shares for $48 per share.
Nov. 22 Preferred shareholders converted 550 of the preferred shares into common shares. The fair values of the common and preferred shares on that day were $13.5 and $46.20 respectively.

Record the share transactions

Expert Solution

Prepare Journal Date Accounts & Explanation entries as provided below: Debit Credit Jan-15 Cash (1000 $10) 10,000 Common Share Capital to record entry for issue of common shares) 10,000 Jun-12 Cash 615,000 Common Share Capital Paid in capital in excess of par (41,000 * (15-10)) 410,000 205,000 (to record entry for issue of common shares) Jun-30 Professional fees Expense 27,230 Common Share Capital ($27,230/$14 10) Paid in capital in excess of par (1,600 (14-10)) 19,450 7,780 (to record entry for issue of common shares against settlement of bill)

ekkarill92 answered 1 year ago

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