During 2018, Company A has the following transactions involving its common and preferred stock:

• Issued 20,000 shares of $8 par common stock for $26 a share; brings total shares outstanding to 50,000 shares
• Issued 6,000 shares of $100 par, 6%, cumulative preferred stock for $150 per share
• When market value of the common stock reached $15 a share, Company A declared a 3-for-1 stock split, reducing the par value to $188 per share The following is required: 1. Prepare a journal entry for each transaction. 2. Discuss the right of shareholders of capital stock for company A that they are entitled to. 3. Company A is formed as a corporation and therefore, its shareholders have limited liability. Limited liability means that stockholders can only lose the amount of their investment. Discuss how this limited liability affects a corporation.