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 2021, its first year of operations: January 2 Issues 100,000 shares of common stock for $20 per share. February 6 Issues 1,500 shares of 8% preferred stock for $12 per share. September 10 Purchases 10,000 shares of its own common stock for $25 per share. December 15 Resells 5,800 shares of treasury stock at $30 per share. Required: Record each of these transactions. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

Answer 1

Ans:

Date	Account titles and description	Debit	Credit
Jan. 1	Cash (100,000 * 20)	2,000,000
	Common stock (100,000 * 1)		100,000
	Additional paid in capital - common stock		1,900,000
	(Issuance of common stock)
Feb. 6	Cash (1500 * 12)	18,000
	8% preferred stock (1500 * 10)		15,000
	Additional paid in capital - preferred stock		3000
Sep. 10	Treasury stock (10,000 * 25)	250,000
	Cash		250,000
	(Repurchase of common stock)
Dec. 15	Cash (5,000 * $30)	150,000
	Additional paid in capital (5,000 * 5)		25,000
	Treasury stock		125,000
	(Reissues of common stock)