Santana Rey created Business Solutions on October 1, 2016. The company has been

Question

Santana Rey created Business Solutions on October 1, 2016. The company has been successful, and Santana plans to expand her business. She believes an additional $100,000 is needed and is investigating three funding sources. a. Santana's sister Cicely is willing to invest $100,000 in the business as a common shareholder. Since Santana currently has about $150,000 invested in the business, Coey's investment will mean that Santana will maintain about 6 % ownership, and Coely will have b. Santana's uncle Marceillo is willing to invest $100,000 in the business as a preferred shareholder. Marcelo would purchase 1,000 shares e. Santana's banker is willing to lend her $100,000 on a 8%, 10-year note payable. She would make monthly payments of$1,213 per month 40% ownership of Business Solutions. of $100 par value, 8% preferred stock. for 10 years Required: 1, Prepare the journal entry to reflect the initial $100,000 investment under each of the options (a), (D), and (c). Journal entry worksheet Record the issue of common stock of $100,000 cash. Note: Enter debits before credts General Journal Debit Credit a.

Explanation / Answer

1 Dr Cash $100,000 Cr Common stock $100,000 2 Dr Cash $100,000 Cr Preferred stock $100,000 3 Dr Cash $100,000 Cr Note Payable $100,000

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