Question

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 2015, 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 $20 per share.Record each of these transactions. (Omit the "$" sign in your response.)

Answer 1

Date Account title and Explanation Debit Credit

Jan-01 Cash (200,000*$15) 3,000,000

Common stock (200,000*$1) 200,000

Paid in capital in excess of par - 2,800,000

Common stock

(To record issue of 200,000 shares for $15)

Feb-06 Cash (1,000*$11) 11,000

Preferred stock (1,000*$10) 10,000

Paid in capital in excess of par 1,000

- Preferred stock

(To record issue of 1,000 shares for $11)

Oct-10 Treasury stock (10,000*$18) 180,000

Cash 180,000

(To record repurchase of 10,000 shares for $18)

Nov-12 Cash (5,000*$20) 100,000

Treasury stock (5,000*$18) 90,000

Paid in capital in excess of par 10,000

- Treasury stock

(To record reissue of 5,000 treasury stock for $20)