Part A

In late $2023,$ the Nicklaus Corporation was formed. The corporate charter authorizes the issuance of $5,000,000$ shares of common stock carrying a $$1$ par value, and $1,000,000$ shares of $$5$ par value, noncumulative, nonparticipating preferred stock. On January $2,2024,3,000,000$ shares of the common stock are issued in exchange for cash at an average price of $$10$ per share. Also on January $2,$ all $1,000,000$ shares of preferred stock are issued at $$20$ per share.

Required:

Prepare journal entries to record these transactions.

Prepare the shareholders' equity section of the Nicklaus balance sheet as of March $31,2024.($Assume net income for the first quarter $2024$ was $$1,000,000.)$

Part B

During $2024,$ the Nicklaus Corporation participated in three treasury stock transactions:

a$.$ On June $30,2024,$ the corporation reacquires $200,000$ shares for the treasury at a price of $$12$ per share.

b$.$ On July $31,2024,50,000$ treasury shares are reissued at $$15$ per share.

c$.$ On September $30,2024,50,000$ treasury shares are reissued at $$10$ 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 $30,2024.($Assume net income for the second and third quarter was $$3,000,000.)$

Part C

On October $1,2024,$ Nicklaus Corporation receives permission to replace its $$1$ par value common stock shares authorized, $3,000,000$ shares issued, and $2,900,000$ shares outstanding$)$ with a new common stock issue having a $$0\mathrm{.}50$ par value. Since the new par value is one$-$half the amount of the old, this represents a $2-$for$-1$ stock split. That is$,$ the shareholders will receive two shares of the $$0\mathrm{.}50$ par stock in exchange for each share of the $$1$ par stock they own. The $$1$ par stock will be collected and destroyed by the issuing corporation.

On November $1,2024,$ the Nicklaus Corporation declares a $$0\mathrm{.}05$ per share cash dividend on common stock and a $$0\mathrm{.}25$ per share cash dividend on preferred stock. Payment is scheduled for December $1,2024,$ to shareholders of record on November $15,2024.$

On December $2,2024,$ the Nicklaus Corporation declares a $1\%$ stock dividend payable on December $28,2024,$ to shareholders of record on December $14.$ At the date of declaration, the common stock was selling in the open market at $$10$ per share. The dividend will result in $58,000(0\mathrm{.}015,800,000)$ additional shares being issued to shareholders.