Liwa Company had the following transactions:

1. Paid the state $2,000 for incorporation fees

2. Issued 6,000 shares of common stock with a stated value of $10 for $120,000.

3. Issued 4000 shares, 10$ par, preferred stock in exchange for equipments. Liwa Corp preferred stock has been actively traded on the market at $60 per share.

4. Purchased 500 shares its own stock for $ 55 per share.

5. Sold 300 of the purchased shares for $ 53 per share.

Instructions: Prepare the journal entries to record the above stock transactions.

Solution question 5:

Transaction	Account title and explanation	Debit	Credit