ABC Inc, was incorporated on 1/15/12. Their corporate charter authorized th following capital stock: Prefered Stock: 7%, Par value $100 per share, 100,000 shares.

Common stock: $1 par value, 500,000 shares.

THe following ransactions occured during the year:

1/19/12-Issued 100,000 shares of common stock for $17 cash per share.

1/31/12- Issued 3,000 shares of preferred stock for $115 cash per share.

11/1/12- Repurchased 30,000 shares of commone stock for $22 cash per share.

12/1/12- Declared and paid a total dividened of $95,000.

Required:

1. Prepare the journal entry for each transaction listed above.

2. In your own words, explain the main differences between common and preferred stock.