Lupito Company had the following transactions occur during 2015: (a) Issued 8,000 shares of common stock to

Question:

Lupito Company had the following transactions occur during 2015:

(a) Issued 8,000 shares of common stock to the founders for land valued at $275,000. Par value of the common stock is $1 per share.

(b) Issued 4,000 shares of $100 par preferred stock for cash at $120.

(d) Purchased 750 shares of outstanding preferred stock issued in (b) for cash at par.

(e) Purchased 2,000 shares of the outstanding common stock issued in (a) for $39 per share.

(f) Reissued 400 shares of repurchased preferred stock at $112.

(g) Reissued 500 shares of reacquired common stock for $45 per share.

(h) Repurchased 200 shares of the common stock sold in (g) for $43 per share. These same 200 shares were later reissued for $40 per share.

Instructions:

1. Prepare the necessary entries to record the preceding transactions involving Lupito's preferred stock. Assume that the par value method is used for recording treasury stock.

2. Prepare the necessary entries for the common stock transactions assuming that the cost method is used for recording treasury stock.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...