### Stockholders' Equity Transactions and Journal Entries for a CompanyA company has authorized two classes of stock:- **Preferred Stock**: 9%, $10 par value- **Common Stock**: $1 par valueThe following transactions affect stockholders' equity during 2021, the company's first year of operations:#### Transactions List1. **January 1**: Issue 300,000 shares of common stock for $17 per share.2. **February 6**: Issue 1,000 shares of preferred stock for $11 per share.3. **October 10**: Purchase 9,000 shares of its own common stock for $15 per share.4. **November 12**: Resell 5,000 shares of treasury stock at $25 per share.Record each of these transactions. *(If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)*#### Journal Entry WorksheetBelow, we illustrate the journal entry worksheet you can use to record the first transaction. Follow these steps to complete the remaining entries:##### Example of Journal Entry for January 1 Transaction:- **Instruction**: Record the issuance of 300,000 shares of common stock for $17 per share.| Date | General Journal | Debit | Credit ||------------|------------------------------------------|------------------|------------------|| Jan 01, 2021 | Cash | $5,100,000 | || | Common Stock ($1 par value) | | $300,000 || | Additional Paid-In Capital—Common Stock | | $4,800,000 |**Note**: Enter debits before credits.#### NavigationYou can use the navigational arrows (left and right) to move between different transaction entries.**Button Options:**1. **Record entry**: Click to record the current journal entry.2. **Clear entry**: Click to clear the current journal entry for re-entry.3. **View general journal**: Click to view all recorded journal entries in the general journal.This educational module intends to help you familiarize yourself with accounting practices related to stockholders' equity and recording transactions in a journal entry format. Ensure accuracy when filling out the debit and credit fields to maintain proper accounting records. ### Transactions Affecting Stockholders' EquityA company has the following two classes of stock authorized: 9% preferred stock with a $10 par value, and common stock with a $1 par value. The following transactions impacted stockholders' equity during 2021, the company's first year of operations:1. **January 1**: Issued 300,000 shares of common stock at $17 per share.2. **February 6**: Issued 1,000 shares of preferred stock at $11 per share.3. **October 10**: Purchased 9,000 shares of its own common stock at $15 per share.4. **November 12**: Resold 5,000 shares of treasury stock at $25 per share.**Note:** Record each of these transactions. If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.### Journal Entry WorksheetHere is the journal entry worksheet for recording these transactions. Be sure to enter debits before credits.#### Transaction Entry Example- **Date**: February 06, 2021- **Description**: Record the issuance of 1,000 shares of preferred stock for $11 per share.#### Worksheet Interface:- **Date**: Field to input the date of the transaction.- **General Journal**: Field to describe the transaction.- **Debit**: Field to enter the debit amounts.- **Credit**: Field to enter the credit amounts.**Buttons available:**- **Record entry**: Button to save the journal entry.- **Clear entry**: Button to clear the input fields.- **View general journal**: Button to view the general journal entries.**Graphical Interface:**The graphical interface includes navigational arrows to move between transaction entries. The entry for February 06, 2021, concerning the issuance of 1,000 shares of preferred stock for $11 per share, is highlighted in this example.---This content is tailored for educational purposes, providing a practical example of how to record stock transactions in a company's first year of operations.

Journal entries to record each transaction is as under:

A company has the following two classes of stock authorized: 9%, $10 par value preferred and $1 par value common. The following transactions affect stockholders' equity during 2021, Its first year of operations: January 1 Issue 300,000 shares of common stock for $17 per share. February 6 Issue 1,000 shares of preferred stock for $11 per share. October 10 Purchase 9,000 shares of its own common stock for S$15 per share. November 12 Resell 5,000 shares of treasury stock at $25 per share. Record each of these transactions. (If no entry Is requlred for a particular transaction/event, select "No Journal Entry Requlred" In the first account fleld.)

A company has the following two classes of stock authorized: 9%, $10 par value preferred and $1 par value common. The following transactions affect stockholders' equity during 2021, Its first year of operations: January 1 Issue 300,000 shares of common stock for $17 per share. February 6 Issue 1,000 shares of preferred stock for $11 per share. October 10 Purchase 9,000 shares of its own common stock for S$15 per share. November 12 Resell 5,000 shares of treasury stock at $25 per share. Record each of these transactions. (If no entry Is requlred for a particular transaction/event, select "No Journal Entry Requlred" In the first account fleld.)

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter12: Corporations: Organization, Stock Transactions, And Dividends

Section: Chapter Questions

Problem 3PA: Selected stock transactions The following selected accounts appear in the ledger of Parks...

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Stockholders equity accounts and other related accounts of Gonzales Company as of January 1, 20--, the beginning of its fiscal year, are shown below. (a)Received 20,000 for the balance due on subscriptions for preferred stock with a par value of 40,000 and issued the stock. (b)Purchased 10,000 shares of common treasury stock for 18 per share. (c)Received subscriptions for 10,000 shares of common stock at 19 per share, collecting down payments of 45,000. (d)Issued 15,000 shares of common stock in exchange for land with a fair market value of 290,000. (e)Sold 5,000 shares of common treasury stock for Si00,000. (f)Issued 10,000 shares of preferred stock at 11.50 per share, receiving cash. (g)Sold 3,000 shares of common treasury stock for 17 per share. REQUIRED 1. Prepare general journal entries for the transactions, identifying each transaction by letter. 2. Post the journal entries to appropriate T accounts. The cash account has a beginning balance of 300,000. 3. Prepare the stockholders equity section of the balance sheet as of December 31, 20--. Net income for the year was 825,000 and dividends of 400,000 were paid.
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