Zerbe Corporation recently hired a new accountant with extensive experience in accounting for partnerships. Because of the pressure of the new job, the accountant was unable to review what he had learned earlier about corporation accounting. During the first month, he made the following entries for the corporation€™s capital stock.

Instructions
On the basis of the explanation for each entry, prepare the entries that should have been made for the capital stocktransactions.

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May 2 Cash 120,000 Capital Stock 120,000 (Issued 10,000 shares of $10 par value common stock at $12 per share) 10 Cash 530,000 Capital Stock 530,000 (Issued 10,000 shares of $20 par value preferred stock at $53 per share) 15 Capital Stock Cash 7,200 7,200 (Purchased 600 shares of common stock for the treasury at $12 per share)