Problem:
Flesher Corporation was authorized to issue 100,000 shares of $5 par common stock and 50,000 shares of $50 par, 5%, cummulative preferred stock. Flesher Corporation completed the following transactions during its first two years of operation:
2009
Jan 2 Issued 15,000 shares of $5 par common stock for $8 per share.
15 Issued 2,000 shares of $50 par perferred stock for $55 per share.
Feb 14 Issued 20,000 shares of $5 par common stock for $9 per share.
Dec 31 During the year, earned $310,000 of cash service revenue and paid $240,000 of cash operating expenses.
31 Declared he cash dividend on outstanding shares of preferred stock for 2009. The dividend will be paid on January 31 to stockholders of record on January 15, 2010.
31 Closed revenue, expense, and dividend accounts to the retained earnings account.
2010
Jan 31 Paid the cash dividend declared on December 31, 2008.
Mar 1 Issued 3,000 shares of $50 par preferred stock for $60 per share.
June 1 Purchased 500 shares of common stock as treasury stock at $9 per share.
Dec 31 During the year, earned $250,00 of cash service revenue and paid $175,000 of cash operating expenses.
31 Declared the dividend on the preferred stock and a $0.50 per share dividend on the common stock.
31 Closed revenue, expense, and dividend accounts to the retained earnings account.
Required.
Prepare journal entries for these transactions for 2009 and 2010.
Prepare the stockholders' equity section of the balance sheet at December 31, 2009.