Finishing Touches has two classes of stock authorized: 8%, $10 par preferred, an

Question

Finishing Touches has two classes of stock authorized: 8%, $10 par preferred, and $1 par value common. The following transactions affect stockholders' equity during 2018, its first year of operations: January 2 Issues 100,000 shares of common stock for $35 per share. February 6 Issues 3,000 shares of 8% preferred stock for $11 per share. September 10 Repurchases 11,000 shares of its own common stock for $40 per share. December 15 Reissues 5,500 shares of treasury stock at $45 per share. Required: Record each of these transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Explanation / Answer

Date Account titles & Explanations Debit Credit 2-Jan Cash (100,000*35) 3500000 Common stock (100000*1) 100000 Paid in capital in excess of par (100,000*34) 3400000 6-Feb Cash (3000*11) 33000 Preferred Stock (3000*10) 30000 paid in capital in excess of par 3000 10-Sep Treasury stock 440000 Cash (11,000*40) 440000 15-Dec Cash (5,500*45) 247500 Treasury stock (5,500*40) 220000 paid in capital in excess-TS 27500

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