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 110,000,050 common shares, $1 par per share. Required: Prepare the appropriate journal entries to record each transaction.

Jan.		9		Issued 80,000,000 common shares for $24 per share.
Mar.		11		Issued 5,600 shares in exchange for custom-made equipment. McCollums shares have traded recently on the stock exchange at $24 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).

Date	General Journal	Debit	Credit
Jan. 12	Land	4,000,000
	Paid-in capitaldonation of land		4,000,000
Sept. 1	Common stock	2,000,000
	Retained earnings	56,000,000
	Cash		58,000,000
Dec. 1	Cash	30,000,000
	Common stock		1,000,000
	Gain on sale of previously issued shares		29,000,000

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

A:

• Record the issue of 80,000,000 million common shares for $24 per share.
• Record the issue of 5,600 shares in exchange for custom-made equipment. McCollums shares have traded recently on the stock exchange at $24 per share.

B:

• Record the donation of land.
• Record the stock transaction occurring on Sept. 1.
• Record the stock transaction occurring on Dec. 1.