Problem 3-1

MI Air, Inc. engages in the following common stock transactions in 2015 for its $1 par value common stock. The firm earned $200 of net income during 2015, its first year of business.
January 1Issued 200 shares to an investor for $8 per share. January 1Issued 100 shares to its attorney/CPA as compensation for establishing the company. (Treat the value of the shares as an organizational expense.) December 1Purchased 40 of the shares sold to the investor for $10 per share, and placed them in the corporate treasury. December 10Issued 75 shares to another investor at $9 per share in order to secure additional financing for the firm. December 12Issued 30 of the treasury shares when the market price was $11 per share. December 15Declared a $.20 per share dividend. December 31Paid the dividend declared on December 15.

Requirements: (Use T accounts as necessary to track account balances)

Journalize the above transactions.

Present the effects of the stock transactions on MI Airs 2015 income statement, and report stockholders equity on the companys December 31, 2015 balance sheet.