Stockholders Equity: Transactions and Balance Sheet Presentation

The following is the stockholders equity of Clipper Corporation at January 1:

8 Percent preferred stock, $50 par value, 10,000 shares authorized;
7,000 shares issued and outstanding	$350,000
Common stock, $20 par value, 50,000 shares authorized;
25,000 shares issued and outstanding	500,000
Paid-in capital in excess of par valuePreferred stock	70,000
Paid-in capital in excess of par valueCommon stock	385,000
Retained earnings	238,000
Total Stockholders Equity	$1,543,000

The following transactions, among others, occurred during the year:

Jan.	15	Issued 1,000 shares of preferred stock for $62 cash per share.
	20	Issued 4,000 shares of common stock at $36 cash per share.
	31	Converted $20,000 face value of convertible bonds payable (the book value of the bonds is $18,500) to common stock. Each $1,000 bond converted to 25 shares of common stock.
May	18	Announced a 2-for-1 common stock split, reducing the par value of the common stock to $10 per share. The authorization was increased to 100,000 shares.
June	1	Acquired equipment with a fair market value of $40,000 in exchange for 2,000 shares of common stock.
Sept.	1	Purchased 2,500 shares of common stock as treasury stock at $18 cash per share.
Oct.	12	Sold 900 treasury shares at $21 per share.
Dec.	22	Issued 500 shares of preferred stock for $59 cash per share.
	28	Sold 1,100 of the remaining treasury shares at $16 per share.
	31	Closed net income of $85,000 to the Retained Earnings account.

Required

• Prepare journal entries for the given transactions and post them to the T-accounts. Do not prepare the journal entry for the Dec. 31 transaction, but post the appropriate amount to the Retained Earnings T-account. Determine the ending balances for the stockholders equity accounts.
• Prepare the stockholders equity section of the balance sheet at December 31.

• Journal entries
• T-Accounts
• Stockholder's equity section

General Journal
Date	Description	Debit	Credit
Jan.15	AnswerCashCommon StockEquipmentPaid-in-Capital from Treasury StockPaid-in-Capital in Excess of Par Value - Common StockPaid-in-Capital in Excess of Par Value - Preferred StockPreferred StockTreasury Stock - CommonBonds PayableDiscount on Bonds Payable	Answer	Answer
	AnswerCashCommon StockEquipmentPaid-in-Capital from Treasury StockPaid-in-Capital in Excess of Par Value - Common StockPaid-in-Capital in Excess of Par Value - Preferred StockPreferred StockTreasury Stock - CommonBonds PayableDiscount on Bonds Payable	Answer	Answer
	Paid-in-Capital in Excess of Par Value - Preferred Stock	Answer	Answer
	Issued shares of preferred stock.
Jan.20	AnswerCashCommon StockEquipmentPaid-in-Capital from Treasury StockPaid-in-Capital in Excess of Par Value - Common StockPaid-in-Capital in Excess of Par Value - Preferred StockPreferred StockTreasury Stock - CommonBonds PayableDiscount on Bonds Payable	Answer	Answer
	Common Stock	Answer	Answer
	AnswerCashCommon StockEquipmentPaid-in-Capital from Treasury StockPaid-in-Capital in Excess of Par Value - Common StockPaid-in-Capital in Excess of Par Value - Preferred StockPreferred StockTreasury Stock - CommonBonds PayableDiscount on Bonds Payable	Answer	Answer
	Issued common stock.
Jan.31	AnswerCashCommon StockEquipmentPaid-in-Capital from Treasury StockPaid-in-Capital in Excess of Par Value - Common StockPaid-in-Capital in Excess of Par Value - Preferred StockPreferred StockTreasury Stock - CommonBonds PayableDiscount on Bonds Payable	Answer	Answer
	Discount on Bonds Payable	Answer	Answer
	Common Stock	Answer	Answer
	AnswerCashCommon StockEquipmentPaid-in-Capital from Treasury StockPaid-in-Capital in Excess of Par Value - Common StockPaid-in-Capital in Excess of Par Value - Preferred StockPreferred StockTreasury Stock - CommonBonds PayableDiscount on Bonds Payable	Answer	Answer
	To record conversions of bonds.
May.18	(Memorandum) Common Stock split 2 for 1.
Jun.01	AnswerCashCommon StockEquipmentPaid-in-Capital from Treasury StockPaid-in-Capital in Excess of Par Value - Common StockPaid-in-Capital in Excess of Par Value - Preferred StockPreferred StockTreasury Stock - CommonBonds PayableDiscount on Bonds Payable	Answer	Answer
	Common Stock	Answer	Answer
	AnswerCashCommon StockEquipmentPaid-in-Capital from Treasury StockPaid-in-Capital in Excess of Par Value - Common StockPaid-in-Capital in Excess of Par Value - Preferred StockPreferred StockTreasury Stock - CommonBonds PayableDiscount on Bonds Payable	Answer	Answer
	Issued common stock in exchange for equipment.
Sept.01	AnswerCashCommon StockEquipmentPaid-in-Capital from Treasury StockPaid-in-Capital in Excess of Par Value - Common StockPaid-in-Capital in Excess of Par Value - Preferred StockPreferred StockTreasury Stock - CommonBonds PayableDiscount on Bonds Payable	Answer	Answer
	AnswerCashCommon StockEquipmentPaid-in-Capital from Treasury StockPaid-in-Capital in Excess of Par Value - Common StockPaid-in-Capital in Excess of Par Value - Preferred StockPreferred StockTreasury Stock - CommonBonds PayableDiscount on Bonds Payable	Answer	Answer
	Purchased treasury stock.
Oct.12	AnswerCashCommon StockEquipmentPaid-in-Capital from Treasury StockPaid-in-Capital in Excess of Par Value - Common StockPaid-in-Capital in Excess of Par Value - Preferred StockPreferred StockTreasury Stock - CommonBonds PayableDiscount on Bonds Payable	Answer	Answer
	AnswerCashCommon StockEquipmentPaid-in-Capital from Treasury StockPaid-in-Capital in Excess of Par Value - Common StockPaid-in-Capital in Excess of Par Value - Preferred StockPreferred StockTreasury Stock - CommonBonds PayableDiscount on Bonds Payable	Answer	Answer
	Paid-in-Capital from Treasury Stock	Answer	Answer
Dec.22	AnswerCashCommon StockEquipmentPaid-in-Capital from Treasury StockPaid-in-Capital in Excess of Par Value - Common StockPaid-in-Capital in Excess of Par Value - Preferred StockPreferred StockTreasury Stock - CommonBonds PayableDiscount on Bonds Payable	Answer	Answer
	AnswerCashCommon StockEquipmentPaid-in-Capital from Treasury StockPaid-in-Capital in Excess of Par Value - Common StockPaid-in-Capital in Excess of Par Value - Preferred StockPreferred StockTreasury Stock - CommonBonds PayableDiscount on Bonds Payable	Answer	Answer
	Paid-in-Capital in Excess of Par Value - Preferred Stock	Answer	Answer
	Issuedpreferred stock.
Dec.28	AnswerCashCommon StockEquipmentPaid-in-Capital from Treasury StockPaid-in-Capital in Excess of Par Value - Common StockPaid-in-Capital in Excess of Par Value - Preferred StockPreferred StockTreasury Stock - CommonBonds PayableDiscount on Bonds Payable	Answer	Answer
	Paid-in-Capital from Treasury Stock	Answer	Answer
	AnswerCashCommon StockEquipmentPaid-in-Capital from Treasury StockPaid-in-Capital in Excess of Par Value - Common StockPaid-in-Capital in Excess of Par Value - Preferred StockPreferred StockTreasury Stock - CommonBonds PayableDiscount on Bonds Payable	Answer	Answer
	To record sale of treasury stock.