Stankovic Inc. 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 common shares:

Instructions
Assume that no other common share transactions had been recorded earlier. Based on the explanation for each entry, prepare the entries that should have been made for the common share transactions. Explain your reasoning.

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May 12 Cash 221,000 Common Shares 221,000 (Issued 13,000 common shares at $17 per share) 10 Cash 400,000 Common Shares 400,000 (Issued 8,000 preferred shares at $50 per share) 15 Common Shares Cash 15,000 15,000 (Purchased and retired 1,000 common shares at $15 per share) 31 Cash 9,000 Common Shares Gain on Sale of Shares 7,500 1,500 (Issued 500 shares at $18 per share)