6. Diane\'s Designs has two classes of stock authorized: 8%, $10 par preferred a

Question

6.

Diane's Designs 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 1 Issue 200,000 shares of common stock for $15 per share.
February 6 Issue 1,000 shares of preferred stock for $11 per share.
October 10 Repurchase 10,000 shares of its own common stock for $18 per share.
November 12 Reissue 5,000 shares of treasury stock at $20 per share.        
  
Record each of these transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Journal entry worksheet

Note: Enter debits before credits.

Explanation / Answer

Date General Journal Debit Credit January 1 Cash 3000000 January 1 Common stock 3000000 February 6 Cash 11000 February 6 Preferred stock 11000 October 10 Treasury stock 180000 October 10 Cash 180000 November 12 Cash 100000 November 12 Treasury stock (5000*$18) 90000 November 12 Additional paid-in-capital (5000*$2) 10000

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