Stockholders' Equity: Transactions and Balance Sheet Presentation The stockholders' equity of Summit Corporation at January 1 follows: 7 Percent preferred stock, $100 par value, 20,000 shares authorized: 5,000 shares issued and outstanding Common stock, $15 par value, 100,000 shares authorized; 40,000 shares issued and outstanding $500,000 600,000 Paid-in capital in excess of par value-Preferred stock 24,000 Paid-in capital in excess of par value-Common stock Retained earnings 360,000 325,000 Total Stockholders' Equity $1,809,000 The following transactions, among others, occurred during the year: Jan. 12 Announced a 3-for-1 common stock split, reducing the par value of the common stock to $5 per share. The authorization was increased to 300,000 shares. Mar. 31 Converted $40,000 face value of convertible bonds payable (the book value of the bonds was $46,000) to common stock. Each $1,000 bond converted to 125 shares of common stock. June 1 Acquired equipment with a fair market value of $80,000 in exchange for 500 shares of preferred stock. Sept. 1 Acquired 10,000 shares of common stock for cash at $14 per share. Oct. 12 Sold 1,500 treasury shares at $19 per share. Nov. 21 Issued 5,000 shares of common stock at $14 per share. Dec. 28 Sold 1,200 treasury shares at $9 per share. 31 Closed net income of $95,000 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. Date General Journal Description Jan.12 (Memorandum) Common Stock split 3 for 1. Mar.31 Premium on Bonds Payable Common Stock Jun.01 To record conversions of bonds. " 4 Debit Credit $ 0 $ 0 $ 0 $ 0 0 0 0 0 Sept.01 Paid-in-Capital in Excess of Par Value - Preferred Stock Issued preferred stock in exchange for equipment. Purchased treasury stock. Oct.12 Treasury Stock Common Sold treasury stock. Nov.21 Common Stock Dec.28 Issued common stock. Paid-in-Capital from Treasury Stock To record sale of treasury stock. 4 4 4 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Cash Bonds Payable Sept.01 0 0 Mar.31 0 0 Mar.31 Oct. 12 0 0 Nov.21 0 0 Dec.28 0 0 Equipment Jun.01 0 Premium on Bonds Payable 0 0 Preferred Stock 50000 Beg. bal Jun.01 Bal 500,000 Beg. bal Common Stock 600,000 0 0 Jan.12 (3 for 1 split) 0 0 Mar.31 0 Nov.21 Bal. 0 0 0 Paid-in-Capital in Excess of Par Value - Beg. bal Preferred Stock 24,000 Paid-in-Capital in Excess of Par Value - Paid-in-Capital from Treasury Stock Treasury Stock - Common Common Stock Beg. bal 360,000 Oct.12 Dec.28 0 0 Sept.01 0 0 0 Oct.12 0 0 Jun.01 Bal. 0 Mar.31 0 0 Bal. 0 Dec.28 0 0 0 0 Nov.21 0 0 Bal. 0 0 Bal. 0 Beg. bal Dec.31 Bal. Retained Earnings 325,000 0 0 0 0 Journal entries T-Accounts Stockholder's equity section Do not use negative signs with your answers. Paid in Capital Stockholders' Equity Additional Paid-in-Capital Paid-in-Capital in Excess of Par value -Preferred Stock Paid-in-Capital in Excess of Par value - Common Stock Total Paid-in-Capital Total Stockholders' Equity $ 0 0 $ 0 0 0 0 0 0 0 $ 0