Recording the Sale of Common and Preferred Stock Why: When companies sell common or preferred stock to raise capital, the resulting ownership claims are recorded in the capital stock section of stockholders' equity. Information: Spectator Corporation is authorized to issue 1,000 shares of preferred stock with a 9% div- idend rate and a par value of $20 per share and 50,000 shares of common stock with a par value of $2 per share. On January 2, 2013, Spectator issues 200 shares of preferred stock at $22 per share and 20,000 shares of common stock at $2.50 per share. Required: 1. How much cash did Spectator raise through its stock issuance? 2. Prepare the journal entries necessary to record the sale of common and preferred stock separately 3. Prepare the stockholders' equity section of Spectator's balance sheet. (Note: Assume Spectator has yet to engage in any operations.)