Part A

During its first year of operations, the A$.$ Clem Corporation entered into the following transactions relating to shareholders$$ equity. The corporation was authorized to issue $118$ million common shares, $$1$ par per share.

Required:

Prepare the appropriate journal entries to record each transaction.

January $9$ Issued $90$ million common shares for $$26$ per share.

March $11$ Issued $5,800$ shares in exchange for custom$-$made equipment. A$.$ Clem shares have traded recently on the stock exchange at $$26$ per share.

Part B

A new staff accountant for the A$.$ Clem Corporation recorded the following journal entries during the second year of operations. A$.$ Clem retires shares that it reacquires $($restores their status to that of authorized but unissued shares$).$

Date General Journal $($$ in millions$)$

Debit Credit

September $1$ Common stock $2$

Retained earnings $60$

Cash $62$

December $1$ Cash $32$

Common stock $1$

Gain on sale of previously issued shares $31$

Required:

Prepare the journal entries that should have been recorded for each of the transactions.