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 $500,000 Common stock, $15 par value, 100,000 shares authorized; 40,000 shares issued and outstanding 600,000 Paid-in capital in excess of par value-Preferred stock 24,000 Paid-in capital in excess of par value-Common stock 360,000 Retained earnings 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 $41,000 face value of convertible bonds payable (the book value of the bonds was $43,000) to common stock. Each $1,000 bond converted to 125 shares of common stock. June 1 Acquired equipment with a fair market value of $65,000 in exchange for 500 shares of preferred stock. Sept. 1 Acquired 10,000 shares of common stock for cash at $11 per share. Oct. 12 Sold 1,500 treasury shares at $13 per share. Nov. 21 Issued 5,000 shares of common stock at $12 per share. Dec. 28 Sold 1,200 treasury shares at $10 per share. 31 Closed net income of $84,000 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. . Debit Credit General Journal Date Description Jan. 12 (Memorandum) Common Stock split 3 for 1. Mar.31 Bonds Payable Premium on Bonds Payable $ 0 x $ 0 $ 0 X $ 0 Common Stock 0 0 x Paid-in-Capital in Excess of Par Value - Common Stock - 0 Ox To record conversions of bonds. Jun.01 Equipment 0 x 0 Preferred Stock 0 50,000 Paid-in-Capital in Excess of Par Value - Preferred Stock 0 OX Issued preferred stock in exchange for equipment. Sept.01 Treasury Stock - Common 0X 0 Cash 0 OX Purchased treasury stock. Oct.12 Cash OX 07 Treasury Stock - Common 0 0 x Paid-in-Capital from Treasury Stock 0 3,000 Sold treasury stock. Nov.21 Cash 0x 0 Common Stock 0 25,000 Paid-in-Capital in Excess of Par Value - Common Stock 0 0 x Issued common stock. Dec.28 Cash OX 0 Paid-in-Capital from Treasury Stock OX 0 Treasury Stock - Common 0 OX To record sale of treasury stock. Journal entries T-Accounts Stockholder's equity section Do not use negative signs with your answers. Stockholders' Equity Paid in Capital Retained Earnings * $ 0 x Retained Earnings X 0 x $ 0 x Additional Paid-in-Capital Paid-in-Capital in Excess of Par value -Preferred Stock 0 x Paid-in-Capital in Excess of Par value - Common Stock 0 x x 0 x 0 x Total Paid-in-Capital Total Paid-in-Capital 0 x Total Stockholders' Equity X 0 x 0 x Total Stockholders' Equity X 0 x Total Stockholders' Equity . $ 0 x