Unifying Concepts: Stock Transactions and the Stockholders' Equity Section
Response to the following problem:
Richard Corporation was founded on January 1, 2009, and entered into the following stock transactions during 2009:
a. Received authorization for 100,000 shares of $20 par-value common stock, 50,000 shares of 6% preferred stock with a par value of $5, and 50,000 shares of no-par common stock.
b. Issued 25,000 shares of the $20 par-value common stock at $24 per share.
c. Issued 10,000 shares of the preferred stock at $8 per share.
d. Issued 5,000 shares of the no-par common stock at $22 per share.
e. Reacquired 1,000 shares of the $20 par-value common stock at $25 per share.
f. Reacquired 500 shares of the no-par common stock at $20 per share.
g. Reissued 250 of the 1,000 reacquired shares of $20 par-value common stock at $23 per share.
h. Reissued all the 500 reacquired shares of no-par common stock at $23 per share.
i. Closed the $14,000 net income to Retained Earnings. Revenues and expenses for the year were $90,000 and $76,000, respectively
Required:
1. Prepare journal entries to record the 2009 transactions in Richard Corporation's books.
2. Prepare the stockholders' equity section of Richard Corporation's balance sheet at December 31, 2009. Assume that the transactions represent all the events involving equity accounts during 2009.