Recording the Sale of Common and Preferred Stock

Donahue Corporation is authorized by its charter from the State of Illinois to issue 2,000 shares of 7% preferred stock with a par value of $30 per share and 125,000 shares of common stock with a par value of $0.01 per share. On January 1, 2013, Donahue issues 1,300 shares of preferred stock at $35 per share and 84,000 shares of common stock at $12.50 per share.

Required:

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Prepare the journal entry to record the issuance of the stock. For a compound transaction, if an amount box does not require an entry, leave it blank.

2013 Jan. 1	Accounts Payable Accounts Receivable Cash Common Stock Preferred Stock Correct 2	Correct 3	Correct 4
	Accounts Payable Accounts Receivable Cash Preferred Stock Retained Earnings Correct 5	Correct 6	Correct 7
	Accounts Payable Accounts Receivable Additional Paid-In Capital - Preferred Stock Retained Earnings Treasury Stock Correct 8	Correct 9	Correct 10
	Accounts Payable Cash Common Stock Retained Earnings Treasury Stock Correct 11	Correct 12	Correct 13
	Accounts Payable Accounts Receivable Additional Paid-In Capital - Common Stock Additional Paid-In Capital - Treasury Stock Treasury Stock Correct 14	Correct 15	Correct 16
	(Record sale of preferred and common stock)