Stockholders' Equity: Transactions and Balance Sheet Presentation The stockholders' equity accounts of Willis Corporation at January 1 appear below: $68,000 8 Percent preferred stock, $10 par value, 50,000 shares authorized; 6,800 shares issued and outstanding Common stock $10 par value, 200,000 shares authorized: 50,000 shares issued and outstanding Paid-in capital in excess of par valuePreferred stock Paid-in capital in excess of par value-Common stock Retained earnings 500,000 68,000 200,000 270,000 During the year, the following transactions occurred: Jan. 10 Issued 35,000 shares of common stock for $18 cash per share. 23 Purchased 10,000 shares of common stock as treasury stock at $19 per share. Mar. 14 Sold one-half of the treasury shares acquired January 23 for $21 per share, July 15 Issued 3,500 shares of preferred stock in exchange for equipment with a fair market value of $128,000. Nov. 15 Sold 1,000 of the treasury shares acquired January 23 for $24 per share. Dec. 31 Closed the net income of $59,000 to the Retained Earnings account. Required a. Set up T-accounts for the stockholders' equity accounts as of the beginning of the year and enter the January 1 balances. HINT: Complete part b. below prior to entering T-account data. Cash Preferred Stock Jan.10 Beg. Jan.23 Jul.15 Mar. 14 Bal. Nov.15 Common Stock Beg. Jan. 10 Bal Equipment Paid-in-Capital in Excess of Par Value - Preferred Stock Jul. 15 Beg. Jul.15 Bal Paid-in-Capital in Excess of Par Value - Common Stock Beg Jan. 10 Bal. Treasury Stock Paid-in-Capital from Treasury Stock Mar.14 Nov. 15 Jan.23 Mar. 14 Nov. 15 Bal. Bal. 0 0 Retained Earnings Bal. Dec.31 Bal. b. Prepare journal entries to record the foregoing transactions and post to T-accounts above in part a. 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. General Journal Description Debit Credit Date Jan. 10 $ 0 $ Common Stock Issued common stock. Jan.23 Purchased treasury stock. Mar. 14 O Treasury Stock - Common Sold treasury stock. Jul.15 Paid-in-Capital in Excess of Par Value - Preferred Stock Issued preferred stock for equipment. Nov.15 O Treasury Stock - Common To record sale of treasury stock. C. Prepare the December 31 stockholders' equity section of the balance sheet. Do not use negative signs with your answers. Stockholders' Equity Paid in Capital Additional Paid-in-Capital Paid-in-Capital in Excess of Par value - Preferred Stock Paid-in-Capital in Excess of Par value - Common Stock Nov.15 Treasury Stock - Common the balance sheet. Cash Common Stock C. Prepare Equipment Paid-in-Capital from Treasury Stock Do not us Paid-in-Capital in Excess of Par Value - Common Stock Paid-in-Capital in Excess of Par Value - Preferred Stock Paid in Cap Preferred Stock Treasury Stock - Common