he stockholders’ equity accounts of Willis Corporation at January 1 appear below: 8 Percent preferred stock, $10 par value, 50,000 shares authorized; 6,800 shares issued and outstanding $68,000 Common stock, $10 par value, 200,000 shares authorized; 50,000 shares issued and outstanding 500,000 Paid-in capital in excess of par value—Preferred stock 68,000 Paid-in capital in excess of par value—Common stock 200,000 Retained earnings 270,000 During the year, the following transactions occurred: Jan. 10 Issued 35,000 shares of common stock for $18 cash per share. 23 Purchased 10,000 shares of common stock as treasury stock at $19 per share. Mar. 14 Sold one-half of the treasury shares acquired January 23 for $21 per share. July 15 Issued 3,500 shares of preferred stock in exchange for equipment with a fair market value of $128,000. Nov. 15 Sold 1,000 of the treasury shares acquired January 23 for $24 per share. Dec. 31 Closed the net income of $59,000 to the Retained Earnings account. Required Prepare journal entries to record the foregoing transactions and post to T-accounts. Do not prepare the journal entry for the Dec. 31 transaction, but post the appropriate amount to the Retained Earnings T-account. Determine the ending balances for the stockholders’ equity accounts. Prepare the December 31 stockholders’ equity section of the balance sheet. Journal Entries T-Accounts Balance Sheets General Journal Date Description Debit Credit Jan.10 Common Stock Issued common stock. Jan.23 Purchased treasury stock. Mar.14 Treasury Stock - Common Sold treasury stock. Jul.15 Paid-in-Capital in Excess of Par Value - Preferred Stock Issued preferred stock for equipment. Nov.15 Treasury Stock - Common To record sale of treasury stock.

College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)

22nd Edition

ISBN:9781305666160

Author:James A. Heintz, Robert W. Parry

Publisher:James A. Heintz, Robert W. Parry

Chapter20: Corporations: Organization And Capital Stock

Section: Chapter Questions

Problem 1MP: Stockholders equity accounts and other related accounts of Gonzales Company as of January 1, 20--,...

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Question

Stockholders’ Equity: Transactions and Balance Sheet Presentation

The stockholders’ equity accounts of Willis Corporation at January 1 appear below:

8 Percent preferred stock, $10 par value, 50,000 shares authorized;
6,800 shares issued and outstanding	$68,000
Common stock, $10 par value, 200,000 shares authorized;
50,000 shares issued and outstanding	500,000
Paid-in capital in excess of par value—Preferred stock	68,000
Paid-in capital in excess of par value—Common stock	200,000
Retained earnings	270,000

During the year, the following transactions occurred:

Jan.	10	Issued 35,000 shares of common stock for $18 cash per share.
	23	Purchased 10,000 shares of common stock as treasury stock at $19 per share.
Mar.	14	Sold one-half of the treasury shares acquired January 23 for $21 per share.
July	15	Issued 3,500 shares of preferred stock in exchange for equipment with a fair market value of $128,000.
Nov.	15	Sold 1,000 of the treasury shares acquired January 23 for $24 per share.
Dec.	31	Closed the net income of $59,000 to the Retained Earnings account.

Required

Prepare journal entries to record the foregoing transactions and post to T-accounts. Do not prepare the journal entry for the Dec. 31 transaction, but post the appropriate amount to the Retained Earnings T-account. Determine the ending balances for the stockholders’ equity accounts.
Prepare the December 31 stockholders’ equity section of the balance sheet.

Journal Entries
T-Accounts
Balance Sheets

General Journal
Date	Description	Debit	Credit
Jan.10
	Common Stock

	Issued common stock.
Jan.23

	Purchased treasury stock.
Mar.14
	Treasury Stock - Common

	Sold treasury stock.
Jul.15

	Paid-in-Capital in Excess of Par Value - Preferred Stock
	Issued preferred stock for equipment.
Nov.15
	Treasury Stock - Common

	To record sale of treasury stock.

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