Various Journal Entries
Response to the following problem:
Sapp Company is authorized to issue 20,000 shares of no-par, $5 stated-value common stock and 5,000 shares of 9%, $100 par preferred stock. It enters into the following transactions:
1. Accepts a subscription contract to 7,000 shares of common stock at $42 per share and receives a 30% down payment.
2. Collects the remaining balance of the subscription contract and issues the common stock.
3. Acquires a building by paying $23,000 cash and issuing 2,000 shares of common stock and 600 shares of preferred stock. Common stock is currently selling at $46 per share; preferred stock has no current market value. The building is appraised at $180,000.
4. Sells 1,000 shares of common stock at $45 per share.
5. Sells 900 shares of preferred stock at $112 per share.
6. Declares a two-for-one stock split on the common stock, reducing the stated value to $2.50 per share.
Required:
Prepare journal entries to record the preceding transactions.