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 $28 per share. February 6 Issues 2,300 shares of 8% preferred stock for $12 per share. September 10 Repurchases 10,000 shares of its own common stock for $33 per share. December 15 Reissues 5,000 shares of treasury stock at $38 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.) Issues 100,000 shares of common stock for $28 per share.

Explanation / Answer

Journal Entries Date Account Title and explanation Debit Credit January , 02 Cash $            28,00,000      To Common Share Capital $                 1,00,000      To Additional Paid in Capital - Common Stock $               27,00,000 (To Record the issue of the common shares ) Feb, 06 Cash $                  27,600       To Preference Share Capital $                     23,000      To Additional Paid in Capital - Preference Stock $                       4,600 (To Record the issue of the preference shares ) Sept, 10 Treasury Stock $               3,30,000       To Cash $           3,30,000.00 (To Record the purchase of common shares as treasury stock) Dec, 15 Cash $               1,90,000      To Treasury Stock $                 1,65,000      To Additional Paid in Capital - Treasury Stock $                     25,000 (To record the sale of treasury stock)

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