Chapter 15, Problem 15.2E

Common Stock Issuance. Par Value, Issue Costs, Disclosure. Advanced Computer Systems reported the following shareholders’ equity section as of the beginning of the current year:

Stockholders’ Equity
Contributed Capital:
Common Stock, $.50 par value, 850,000 shares authorized, 225,000 shares issued, and 201.375 shares outstanding	$ 112,500
Additional Paid-in Capital in Excess of Par - Common	9,900,000
Total Contributed Capital	$10,012,500
Retained Earnings	$20,346,563
Accumulated Other Comprehensive Income (Loss)	(453,800)
Less: Treasury Stock (23,625 common shares at cost)	(945,000)
Total Stockholders’ Equity	$28,960,263

Advanced Computer issued 125,000 shares of its $.50 par common stock during the year. The market price of the shares on the date of issue was $51 per share. The company paid $88,000 in underwriting fees to issue the shares. Advanced reported $6,789,000 in net income for the year and declared and paid dividends of $4 per share at year-end.

Required

1. a. Prepare the entry to record the new stock issue.
2. b. Prepare the journal entries required to record the declaration and payment of the cash dividend.
3. c. Prepare the stockholders’ equity section of the balance sheet at the end of the year.