Part A

During its first year of operations, the McCollum Corporation entered into the following transactions relating to shareholders equity. The corporation was authorized to issue 100 million common shares, $1 par per share.

Required:

Prepare the appropriate journal entries to record each transaction.

Jan. 9	Issued 40 million common shares for $20 per share
Mar. 11	Issued 5,000 shares in exchange for custom-made equipment. McCollum's shares have traded recently on the stock exchange at $20 per share

Part B

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

Jan. 12 Land.................................. 2,000,000,000

Paid-in capital - donation of land 2,000,000,000

Sept. 1 Common stock....................................... 2,000,000,000

Retained earnings................................. 48,000,000,000

Cash.................................................. 50,000,000,000

Dec. 1 Cash..................................................... 26,000.000.000

Common stock................................. 1,000,000,000

Gain on sale of previously issued shares 25,000,000,000

Required:

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