The following is the stockholders' equity of Laker Corporation at January 1: The following transactions, among others,
Question:
The following is the stockholders' equity of Laker Corporation at January 1:
The following transactions, among others, occurred during the year:
Jan. 15 Issued 2,000 shares of preferred stock for \(\$ 65\) cash per share.
20 Issued 4,000 shares of common stock at \(\$ 40\) cash per share.
31 Converted \(\$ 20,000\) face value of convertible bonds payable (the book value of the bonds is \(\$ 18,500\) ) to common stock. Each \(\$ 1,000\) bond converted to 25 shares of common stock.
May 18 Announced a 2-for-1 common stock split, reducing the par value of the common stock to \(\$ 10\) per share. The authorization was increased to 100,000 shares.
June \(\quad 1\) Acquired equipment with a fair market value of \(\$ 50,000\) in exchange for 2,000 shares of common stock.
Sept. 1 Purchased 3,500 shares of common stock as treasury stock at \(\$ 19\) cash per share.
Oct. 12 Sold 900 treasury shares at \(\$ 21\) per share.
Dec. 22 Issued 600 shares of preferred stock for \(\$ 59\) cash per share.
28 Sold 1,100 of the remaining treasury shares at \(\$ 18\) per share.
31 Closed net income of \(\$ 150,000\) to the Retained Earnings account.
Required
a. Set up T-accounts for the stockholders' equity accounts as of the beginning of the year and enter the January 1 balances.
b. Prepare journal entries for the given transactions and post them to the T-accounts (set up any additional T-accounts needed). Do not prepare the journal entry for the Dec. 31 transaction, but post the appropriate amount to the Retained Earnings T-account. Determine the ending balances for the stockholders' equity accounts.
c. Prepare the stockholders' equity section of the balance sheet at December 31 .
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