Question

The Stockholder Equity accounts of Evangeline's on January 1, 2019 appear below:

Common Stock, $5 par value, 225,000 shares authorized,

25,000 shares issued and outstanding $125,000

Additional Paid In Capital - Common Stock 175,000

Retained Earnings 87,950

During the year, the following transactions occurred:   

a. Issued 15,000 shares of Preferred Stock, 5.5%, $100 par value for $185 cash per share.

b. Issued 28,000 shares of common stock for $13 cash per share

c. Purchased 8,000 shares of common stock at $19 cash per share

d. Sold 5,000 shares of the treasury shares acquired for $25 per share.

e. Sold 1,500 shares of treasury stock for $18 per share.

Prepare the journal entries to record the transactions listed, (a) through (e).

Answer 1

Journal entry are shown below
Date	General Journal	Debit	Credit
	Cash (15,000*185)	$2,775,000
	Preferred stock (15,000*100)		$1,500,000
	Additional paid in capital - Preferred stock (15,000*(185-100))		$1,275,000
	(To record preferred shares issued)
	Cash (28,000*13)	$364,000
	Common stock (28,000*5)		$140,000
	Additional paid in capital - Common stock (28,000*(13-5))		$224,000
	(To record common stock issued)
	Treasury stock (8,000*19)	$152,000
	Cash		$152,000
	(To record treasury stock purchased)
	Cash (5,000*25)	$125,000
	Treasury stock (5,000*19)		$95,000
	Additional paid in capital - Treasury shares (5,000*(25-19))		$30,000
	(To record treasury shares reissued)
	Cash (1,500*18)	$27,000
	Additional paid in capital - Treasury shares (5,000*(19-18))	$1,500
	Treasury stock (1,500*19)		$28,500
	(To record treasury shares reissued)