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 110,000,080 common shares, $1 par per share. Required: Prepare the appropriate journal entries to record each transaction. Jan. 9 Issued 90,000,000 common shares for $28 per share. Mar. 11 Issued 5,900 shares in exchange for custom-made equipment. McCollums shares have traded recently on the stock exchange at $28 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 4,000,000 Retained earnings 128,000,000 Cash 132,000,000 Dec. 1 Cash 68,000,000 Common stock 2,000,000 Gain on sale of previously issued shares 66,000,000

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