Part A

In late $2020,$ the Nicklaus Corporation was formed. The corporate charter authorizes the issuance of $4,000,000$ shares of common

stock carrying a $$1$ par value, and $1,000,000$ shares of $$5$ par value, noncumulative, nonparticipating preferred stock. On January $2,$

$2021,2,000,000$ shares of the common stock are issued in exchange for cash at an average price of $$12$ per share. Also on January

all $1,000,000$ shares of preferred stock are issued at $$25$ per share.

Required:

Prepare journal entries to record these transactions.

Prepare the shareholders' equity section of the Nicklaus balance sheet as of March $31,2021.($Assume net income for the first

quarter $2021$ was $$1,050,000.)$

Part B

During $2021,$ the Nicklaus Corporation participated in three treasury stock transactions:

a$.$ On June $30,2021,$ the corporation reacquires $280,000$ shares for the treasury at a price of $$14$ per share.

b$.$ On July $31,2021,40,000$ treasury shares are reissued at $$17$ per share.

c$.$ On September $30,2021,40,000$ treasury shares are reissued at $$12$ per share.

Required:

Prepare journal entries to record these transactions.

Prepare the Nicklaus Corporation shareholders' equity section as it would appear in a balance sheet prepared at September $30,$

$($Assume net income for the second and third quarter was $$2,500,000.)$