On September 1, Magliolo, Inc., (a) issues 20,000 shares of $12 par value preferred stock at $50 cash per share and (b) issues 118,000 shares of $4 par value common stock at $39 cash per share.

a. Using the financial statement effects template, illustrate the effects of these two issuances.

Balance Sheet
Transaction	Cash Asset	+	Noncash Assets	=	Liabilities	+	Contrib. Capital	+	Earned Capital
(a)	$Answer	+	$Answer	=	$Answer	+	$240,000	+	$Answer
	Answer	+	Answer	=	Answer	+	Answer	+	Answer
(b)	Answer	+	Answer	=	Answer	+	472,000	+	Answer
	Answer	+	Answer	=	Answer	+	Answer	+	Answer

Income Statement
	Revenues	-	Expenses	=	Net Income
	$Answer	-	$Answer	=	$Answer
	Answer	-	Answer	=	Answer
	Answer	-	Answer	=	Answer
	Answer	-	Answer	=	Answer

b. Prepare the journal entries for the two issuances.

General Journal
	Description	Debit	Credit
(a)	Answer	Answer	Answer
	Preferred Stock	Answer	Answer
	Answer	Answer	Answer
	To record issuance of preferred stock
(b)	Answer	Answer	Answer
	Common stock	Answer	Answer
	Answer	Answer	Answer
	To record issuance of common stock

c. Post the journal entries from b to the related T-accounts.

Cash (A)
(a)	Answer	Answer
(b)	Answer	Answer

Common Stock (SE)
(a)	Answer	Answer
(b)	Answer	Answer

Preferred Stock (SE)
(a)	Answer	Answer
(b)	Answer	Answer

Additional Paid-in Capital (SE)
(a)	Answer	Answer
(b)	Answer	Answer