Dusulest ourse n Reluri Lu Course # My Subscriptions Am O Stockholders' Equity: Transactions and Balance Sheet Presentation The stockholders' equity of Peak Corporation at January 1 follows: 7 Percent preferred stock, $100 par value, 20,000 shares authorized; 5,000 shares issued and outstanding $500,000 Common stock. $15 par value, 100,000 shares authorized: 40,000 shares issued and outstanding 600,000 Paid-in capital in excess of par value-Preferred stock 24,000 Paid-in capital in excess of par value-Common stock 360,000 Retained earnings 325,000 Total Stockholders' Equity $1,809,000 The following transactions, among others, occurred during the year: Announced a 4-for-1 common stock split, reducing the par value of the common stock to $3.75 per share. TH Jan. 12 authorization was increased to 400,000 shares. Converted $40,000 face value of convertible bonds payable (the book value of the bonds was $43,000) to Mar. 31 common stock. Each $1,000 bond converted to 125 shares of common stock. June 1 Acquired equipment with a fair market value of $90,000 in exchange for 500 shares of preferred stock, Sept. 1 Acquired 10,000 shares of common stock for cash at $10 per share. Oct. 12 Sold 1.500 treasury shares at $12 per share. Nov. 21 Issued 5,000 shares of common stock at 511 cash per share. Dec. 28 Sold 1,200 treasury shares at $9 per share. 31 Closed net income of $105,000 to the Retained Earnings account Required a. Set up T-accounts for the stockholders' equity accounts as of the beginning of the year an January 1 balances. HINT: Complete part b. below prior to entering any additional T-account data. Cash Bonds Payable Sept.01 Mar 31 Oct.12 Nov.31 Dec. 28 Premium on Bonds Payable Mar.31 Equipment Preferred Stock Jun.01 Beg Jun.01 Ba Common Stock Beg. (4 for 1 split) Jan. 12 Mar.31 Nov.21 Bal. Paid-in-Capital in Excess of Par Value - Preferred Stock Beg. Jun.01 Bal. Paid-in-Capital in Excess of Par Value - Common Stock Beg. Mar 31 Nov.21 Bal. Paid-in-Capital from Treasury Stoc Oct.12 Dec.28 Bal. Treasury Stock - Common Sept.01 Oct.12 Dec.28 Bal Retained Earnings Bal. Dec. 31 Bal. LULUuise HEM SUDSCriptions Amy Sn b. Prepare journal entries for the given transactions and post them to the T-accounts above in part a. Do not prepare the journal entry for the Dec. 31 transaction, but post the appropriate amount to the Retained Earnings T-account. Determine the ending balances for the stockholders' equity accounts. General Journal Date Description Debit Credit Jan. 12 (Memorandum) Common Stock split4 for 1. Mar 31 Premium on Bonds Payable Common Stock To record conversions of bonds. Jun.01 Paid-in-Capital in Excess of Par Value . Preferred Stock Issued preferred stock in exchange for equipment. Sept.01 Purchased treasury stock. Oct.12 Treasury Stock - Common Sold treasury stock Nov.21 Common Stock Issued common stock. Dec. 28 Purchased treasury stock. Oct.12 Treasury Stock - Common Sold treasury stock. Nov.21 Common Stock Issued common stock. Dec. 28 Paid-in-Capital from Treasury Stock To record sale of treasury stock. c. Prepare the stockholders' equity section of the balance sheet at December 31. Do not use negative signs with your answers. Stockholders' Equity Paid in Capital Additional Paid-in-Capital Paid-in-Capital in Excess of Par value. Preferred Stock Paid-in-Capital in Excess of Par value. Common Stock Total Paid-in-Capital