Question: An Wyatt Corporation recently hired a new accountant with extensive experience in accounting for partnerships. Because of the pressure of the new job, the accountant was unable to review what he had learned earlier about corporation accounting. During the first month, the accountant made the following entries for the corporation's capital stock.
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May 2
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Cash
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144,000
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|
|
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Capital Stock
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144.000
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|
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(Issued 12,000 shares of $5 par value common stock at $12 per share)
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|
|
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10
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Cash
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600.000
|
|
|
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Capital Stock
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600.000
|
|
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(Issued 10,000 shares of $50 par value preferred stock at $60 per share)
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|
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15
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Capital Stock
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14,000
|
|
|
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Cash
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14,000
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(Purchased 1,000 shares of common stock for the treasury at $14 per share)
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|
|
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31
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Cash
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7$00
|
|
|
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Capital Stock
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2.500
|
|
|
Gain on Sale of Stock
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5,000
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|
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(Sold 500 shares of treasury stock at $15 per share)
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|
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Instructions:
On the basis of the explanation for each entry, prepare the entry that should have been made for the capital stock transactions.