Stockholders' Equity Transactions, Journal Entries, and T-Accounts The stockholders' equity of Fremantle Corporation at January 1 follows: 8 Percent preferred stock, $100 par value, 20,000 shares authorized; 4,000 shares issued and outstanding $400,000 Common stock, $2 par value, 10,000 shares authorized; 40,000 shares issued and outstanding 80,000 Paid-in capital in excess of par value-Preferred stock 200,000 Paid-in capital in excess of par value-Common stock 800,000 Retained earnings 550,000 Total Stockholders' Equity $2,030,000 The following transactions, among others, occurred during the year: Jan. 1 Announced a 2-for-1 common stock split, reducing the par value of the common stock to $1 per share. Converted $70,000 face value of convertible bonds payable (the book value of the bonds was $75,000) to common stock. Each $1,000 bond converted to 125 shares Mar. 31 of common stock. June 1 Acquired equipment with a fair market value of $45,000 in exchange for 300 shares of preferred stock. Sept. 1 Acquired 10,000 shares of common stock for cash at $20 per share. Nov. 21 Issued 5,000 shares of common stock at $22 cash per share. Dec. 28 Sold 1,000 treasury shares at $24 per share. 31 Closed net income of $103,000, to the Retained Earnings account. HINT: Complete part b. below prior to entering any additional T-account data. Cash Bonds Payable Premium on Bonds Payable Mar 31 Mar 31 Sep.01 Nov.21 Dec.28 Equipment Jun.01 Preferred Stock Common Stock Beg. Paid-in-Capital in Excess of Par Value - Preferred Stock Beg. Jun.01 Bal. Beg. Mar 31 Nov.21 Bal. Jun 01 Bal. Paid-in-Capital in Excess of Par Value - Common Stock Beg. Mar 31 Nov.21 Bal. Retained Earnings Paid-in-Capital from Treasury Stock Dec.28 Bal. Treasury Stock - Common Sept.01 Dec.28 Bal. Bal. Dec.31 Bal. b. Prepare journal entries for the given transactions and post them to the 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. Date General Journal Description (Memorandum) Common Stock split 2 for 1. Debit Credit Jan.01 Mar 31 Premium on Bonds Payable Common Stock To record conversion of bonds. Jun.01 Paid-in-Capital in Excess of Par Value - Preferred Stock Issued preferred stock in exchange for equipment. Sept.01 Purchased treasury stock. Nov.21 Common Stock Issued common stock. Dec. 28 Paid-in-Capital from Treasury Stock To record sale of treasury stock