Problem - Hatch Company has two classes of capital stock: 8%, $20 par preferred and $5 par common. At December 31, 2017, the following accounts were included in stockholders' equity.
Preferred Stock, 1,000,000 shares authorized, 150,000 shares issued and outstanding - $3,000,000
Common Stock, 5,000,000 shares authorized, 2,000,000 shares issued and outstanding - 10,000,000
Paid-in Capital in Excess of Par - Preferred Stock - 200,000
Paid-in Capital in Excess of Par - Common Stock - 27,000,000
Retained Earnings - 4,500,000
The following transactions affected stockholders' equity during 2018.
Jan. 1 - 30,000 shares of preferred stock issued at $22 per share.
Feb. 1 - 100,000 shares of common stock issued at $20 per share.
June 1 - Declared a 5% stock dividend on the outstanding common stock when the stock is selling for $25 per share.
June 20 - Issued the stock dividend declared on June 1.
July 1 - 30,000 shares of common treasury stock purchased at $10 per share.
Sept. 15 - 10,000 shares of treasury stock reissued at $11 per share.
Dec. 31 - The preferred dividend is declared, and a common dividend at $0.50 per share is declared.
Dec. 31 - Net income is $2,100,000.
Required:
Prepare Journal Entries to Record the Transactions.
Post all information into T-accounts.
Prepare the stockholders' equity section for Hatch Company at December 31, 2018. Show all supporting computations.