Layes Corporation has been authorized to issue 20,000 shares of \(\$ 100\) par value, 7\%, noncumulative preferred stock and 1,000,000 shares of no-par common stock. The corporation assigned a \(\$ 5\) stated value to the common stock. At December 31, 2025, the ledger contained the following balances pertaining to stockholders' equity.

The preferred stock was issued for \(\$ 170,000\) cash. All common stock issued was for cash. In November 4,000 shares of common stock were purchased for the treasury at a per share cost of \(\$ 9\). No dividends were declared in 2025.

Instructions

a. Prepare the journal entries for the following.
1. Issuance of preferred stock for cash.
2. Issuance of common stock for cash.
3. Purchase of common treasury stock for cash.

b. Prepare the stockholders' equity section of the balance sheet at December 31, 2025 .

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Preferred Stock Paid-in Capital in Excess of Par-Preferred Stock Common Stock Paid-in Capital in Excess of Stated Value-Common Stock Treasury Stock (4,000 common shares) Retained Earnings Accumulated Other Comprehensive Income $ 150,000 20,000 2,000,000 1,520,000 36,000 82,000 51,000