Maxville Company issues 250 shares of $50 par preferred stock and 1,000 shares of $10 par common stock in a “package” sale on December 31. Total proceeds received amount to $39,700. Required:   Record the transaction for each independent assumption shown:   1. The common stock has a current market value of $19 per share; the current market value of preferred stock is not known. 2. The common stock and the preferred stock have a current market value per share of $22 and $62, respectively.

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Stockholder's Equity

The stockholders’ equity (often referred to as the book value of the company) is the number of assets available to the stockholder after its entire liabilities is paid off. The stockholders’ equity is also sometimes referred to as owner's equity. The stockholders’ equity or book value generally includes common stock, treasury stock retained earnings. It is an indicator of a company's financial strength and is an important item on the company's balance sheet.