Pringle Corporation has been authorized to issue 20,000 shares of $100 par value, 7%, noncumulative preferred stock and 1,000,000 shares of no par common stock.
The corporation assigned a $5 stated value to the common stock. At December 31, 2014, the ledger contained the following balances pertaining to stockholders’ equity.
|
Preferred Stock |
$150,000 |
|
|
Paid in Capital in Excess of Par Value—Preferred Stock |
20,000 |
|
|
Common Stock |
2,000,000 |
|
|
Paid in Capital in Excess of Stated Value—Common Stock |
1,520,000 |
|
|
Treasury Stock— (4,000 common shares) |
36,000 |
|
|
Retained Earnings |
82,000 |
The preferred stock was issued for $170,000 cash. All common stock issued was for cash. In November 4,000 shares of common stock were purchased for the treasury at a per share cost of $9. No dividends were declared in 2014.
A)Prepare the journal entries for the following. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
|
(1) |
Issuance of preferred stock for cash. |
|
|
(2) |
Issuance of common stock for cash. |
|
|
(3) |
Purchase of common treasury stock for cash. |
B)Prepare the stockholders’ equity section of the balance sheet at December 31, 2014.