RECORDING THE SALE OF COMMON AND PREFERRED STOCK Donahue Corporation is authorized by its charter from the state of Illinois to issue 750 shares of preferred stock with a 7 percent dividend rate and a par value of $50 per share and 22,000 shares of common stock with a par value of $0.01 per share. On January 1, 2009, Donahue Corporation issues 250 shares of preferred stock at $55 per share and 12,000 shares of common stock at $13 per share.

Required:

Record the necessary journal entry for January 1, 2009.

Cornerstone Exercise