Example 1

A company is authorized to issue 50,000 shares of $50 par value,

8%, cumulative, fully participating preferred stock, and 750,000
shares of $5 par value common stock. Prepare journal entries to
record the following selected transactions that occurred during
the company's first year of operations:
 Example 2
A company is authorized to issue 50,000 shares of $50 par,
10%, noncumulative, nonparticipating preferred stock and
500,000 shares of no-par common stock. Prepare journal
entries to record the following selected transactions that
occurred during this year:
Solution
 Example 3
On July 31, a company declared a cash dividend of
$0.25 per common share to the shareholders of
record on August 15. The cash dividend will be
paid on August 25. This company has 500,000
shares authorized and 100,000 shares
outstanding. Prepare the journal entries required
on July 31 and August 25.
Solution
 Example 4
A company's only treasury stock transactions for the
current year follow: (1) 1,000 shares of its common
stock were purchased on June 1 for $40,000; (2) On July
1 it reissued 500 of these shares at $45 per share; (3) On
August 1 it reissued the 500 remaining treasury shares
at $38 per share.

1) Prepare the journal entries required to record these

transactions.
2) Calculate the balance in Paid-in Capital, Treasury
Stock, on September 1 assuming its beginning-year
balance is zero.
Solution