Question

On January 5, 2018, Parker Corporation received a charter granting the right to issue 6,000 shares of $100 par value, 7% cumulative and nonparticipating preferred stock, and 60,000 shares of $10 par value common stock. It then completed these transactions:

Jan. 15th. Issued 40,000 shares of common stock at $18 per share.

Feb. 22nd. Issued to Martinez Corp. 3,000 shares of preferred stock for the following assets: equipment with a fair value of $30,000; a factory building with a fair value of $60,000; and land with an appraised value of $170,000.

July 23rd. Purchased 2,000 shares of common stock at $20 per share.

Oct. 10th. Sold the 2,000 treasury shares at $15 per share.

Dec. 31st. Declared a $0.30 per share cash dividend on the common stock and declared the preferred dividend.

Prepare all the necessary journal entries for the transactions listed above for Parker Corporation.

Answer 1

		Debit	Credit
Jan-15	Cash (40,000*18)	$ 720,000.00
	Common Stock		$ 400,000.00
	Paid-in Capital in Excess of Par—Common		$ 320,000.00
Feb-22	Equipment	$    30,000.00
	Factory Building	$    60,000.00
	Land	$ 170,000.00
	Discount on Issue of Shares- Preferred	$    40,000.00
	Preferred Stock		$ 300,000.00
Jul-23	Treasury Stock	$    40,000.00
	Cash		$    40,000.00
Oct-10	Cash	$    30,000.00
	Retained Earnings	$    10,000.00
	Treasury Stock		$    40,000.00
Dec-31	Retained Earnings	$    33,000.00
	Cash Dividend Payable—Common		$    12,000.00
	Cash Dividend Payable—Preferred		$    21,000.00