Hoop It Up has two classes of stock authorized: 7%, $20 par preferred and $1 par value

Question:

Hoop It Up has two classes of stock authorized: 7%, $20 par preferred and $1 common. The following transactions affect stockholders’ equity during 2015, its first year of operations:
February 2 Issue 1 million shares of for $20 per share.
February 4 Issue 50,000 shares of preferred stock for $21 per share.
June 15 Purchase 100,000 shares of its own for $18 per share.
August 15 Reissue 75,000 shares of treasury stock for $23 per share.
November 1 Declare a cash on its of $1 per share and a $70,000 (7% of cash on its preferred stock payable to all stockholders on record on November 15. Hint: Dividends are not paid on treasury stock.
November 30 Pay the dividends declared on November 1.

Required:
1. Record each of these transactions.
2. Prepare the stockholders’ equity section of the as of December 31, 2015. Net income for the year was $3,200,000.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...