On January 1, 2021, the stockholders’ equity section of Jayhawk Corporation’s balance sheet showed the following Preferred stock, $100 par value, 5%, 50,000 shares authorized, 5,000 shares issued and outstanding $500,000 Additional Paid-in-Capital, Preferred Stock 100,000 Common stock, $3 par value, 500,000 shares authorized, 20,000 shares issued and outstanding 60,000 Additional Paid-in-Capital, Common Stock 250,000 Total Contributed Capital 910,000 Retained Earnings 320,000 Total Stockholders' Equity $1,230,000 During the year, 2021, the following transactions occurred: February 2 Issued 2,000 shares of common stock for $22 per share. April 15 Issued 1,000 shares of preferred stock for $125 per share. July 10 Repurchased 500 shares of common stock (treasury stock) at $20 per share. Required: Prepare journal entries to record the above transactions. Assume that net income was $205,000 and dividends of $30,000 were declared and paid. Prepare the stockholders’ equity section of the balance sheet at December 31, 2021.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On January 1, 2021, the stockholders’ equity section of Jayhawk Corporation’s balance sheet showed the following

Preferred stock, $100 par value, 5%, 50,000 shares authorized,
5,000 shares issued and outstanding	$500,000
Additional Paid-in-Capital, Preferred Stock	100,000
Common stock, $3 par value, 500,000 shares authorized,
20,000 shares issued and outstanding	60,000
Additional Paid-in-Capital, Common Stock	250,000
Total Contributed Capital	910,000
Retained Earnings	320,000
Total Stockholders' Equity	$1,230,000

During the year, 2021, the following transactions occurred:

February 2 Issued 2,000 shares of common stock for $22 per share.

April 15 Issued 1,000 shares of preferred stock for $125 per share.

July 10 Repurchased 500 shares of common stock (treasury stock) at $20 per share.

Required:

Prepare journal entries to record the above transactions.
Assume that net income was $205,000 and dividends of $30,000 were declared and paid. Prepare the stockholders’ equity section of the balance sheet at December 31, 2021.

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