Part a

Jefferson Corporation is a publicly-held corporation whose stock trades on a national exchange. Jefferson issued common stock to its law firm in exchange for legal services received. The common stock has a total par value of $585 and a total market value of $2,000.

Required

Prepare the journal entry to record this issuance of stock.

Part b

Monroe Corporation acquired 1,000 shares of its $50 par value common stock on June 15, 2020 at a cost of $425,000. On February 1, 2021, the company sold 400 of these shares for $145,000.

Required

Assuming that Monroe has a credit balance of $10,000 in its APIC Treasury Stock account resulting from previous treasury stock transactions, prepare the necessary journal entries at June 15, 2020 and February 1, 2021.