Finishing Touches has two classes of stock authorized: 8%, $10 par preferred, an
ID: 2512458 • Letter: F
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 $34 per share.
February 6 Issues 2,900 shares of 8% preferred stock for $12 per share.
September 10 Repurchases 10,000 shares of its own common stock for $39 per share.
December 15 Reissues 5,000 shares of treasury stock at $44 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
Sr.No
Date
Particulars
Dr Amount
Cr Amount
1
Jan,2
Cash Account DR
3,400,000.00
To Share Capital
100,000.00
To Share premium
3,300,000.00
2
Feb,6
Cash Account DR
34,800.00
To 8% Preferred Stock
29,000.00
To Share Premium
5,800.00
3
Sep,10
Share Capital Dr
10,000.00
Share Premium Dr
330,000.00
Loss on Buy Back of Common Stock
50,000.00
To Cash
390,000.00
4
Dec,15
Cash Account DR
220,000.00
To Share Capital
5,000.00
To Share premium
215,000.00
Sr.No
Date
Particulars
Dr Amount
Cr Amount
1
Jan,2
Cash Account DR
3,400,000.00
To Share Capital
100,000.00
To Share premium
3,300,000.00
2
Feb,6
Cash Account DR
34,800.00
To 8% Preferred Stock
29,000.00
To Share Premium
5,800.00
3
Sep,10
Share Capital Dr
10,000.00
Share Premium Dr
330,000.00
Loss on Buy Back of Common Stock
50,000.00
To Cash
390,000.00
4
Dec,15
Cash Account DR
220,000.00
To Share Capital
5,000.00
To Share premium
215,000.00
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