1.

) Journal Entry

1.) Cash 110,000

Preference shares 100,000
Share premium-pref 10,000

2.) Cash 110,000

Ordinary shares 100,000
Share premium-ordinary 10,000

3.) Cumulative earnings 10,000

Cash 10,000

4.) Cumulative earnings 12,500

Ordinary share 10,000
Share premium-ordinary share 2,500

5.) Treasure share 12,000

Share premium 500
Cash 12,500

2.) Share capital balance

P/S 100,000
O/S 100,000
Total 200,000

3.) Pain-in Capital balance

P/S 9,500
O/S 10,000
Total 19,500

4.) Legal Capital

Share capital 200,000
Pain-in capital 19,500
Total 219,500

5.) Equity
Legal capital 219,500
Treasury shares 12,000
Total 207,500