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, Cicelys investment will mean that Santana will maintain about 60% ownership, and Cicely will have 40% ownership of Business Solutions. shares of $100 par value, 9% preferred stock. month for 11 years. b. Santana's uncle Marcello is willing to invest $100,000 in the business as a preferred shareholder. Marcello would purchase 1,000 C. Santana's banker is willing to lend her $100,000 on a 996, 11-year note payable. She would make monthly payments of $1,196 per Required 1. Prepare the journal entry to reflect the initial $100,000 investment under each of the options (a), (b), and (c). View transaction list Journal entry worksheet Record the issue of common stock of $100,000 cash. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journal

Explanation / Answer

a Cash 100000       Common stock 100000 b Cash 100000       Preferred stock 100000 c Cash 100000       Note Payable 100000

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