Answer and Explanation:
1. Cash Dr, $120,000
          To Common Stock $100,000    (5,000 × $20)
          To Additional Paid - in - Capital in Excess of Par $20,000
(Being issue of common stock is recorded)
2. Cash Dr, $28,000
          To Common Stock Dr, $2,500   (2,500 × $1)
          To Additional Paid - in - Capital in Excess of Stated $31,500
(To record issue of common stock to promoters)
3. Organization Expenses Dr, $28,000
           To Common Stock Dr, $28,000
(Being issue of common stock in exchange of organization expenses is recorded)
4. Cash Dr, $121,750
           To Preferred Stock $93,750  (1,250 × $75)
           To Additional Paid - in - Capital in Excess of Par (Preferred) $28,000
(Being issue of Preferred stock is recorded)