Global Air Inc. recently hired a new accountant with limited real-world experience in corporate accounting. Prior to starting the new job, the accountant was very busy and was unable to review any texts on 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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Oct. 5 Cash 39,000 Capital Stock Gain on Sale of Stock 1,000 38,000 (Issued 1,000 shares of $1 par value common stock at $39 per share) 12 Cash 330,000 Capital Stock 330,000 (Issued 3,000 shares of $100 par value preferred stock at $110 per share) 13 Capital Stock 20,000 Cash 20,000 (Purchased 500 shares of common stock for the treasury at $40 per share) 26 Cash 22,500 Capital Stock Gain on Sale of Stock 500 22,000 (Sold 500 shares of treasury stock at $45 per share)