An inexperienced accountant for Chetola Corporation made the following entries.
 

July 1		Cash		240,000
		Common Stock				240,000
		(Issued 15,000 shares of no-par common stock, stated value $10 per share)
Sept. 1		Common Stock		32,000
		Retained Earnings		4,000
		Cash				36,000
		(Purchased 2,000 shares issued on July 1 for the treasury at $18 per share)
Dec. 1		Cash		20,000
		Common Stock				16,000
		Gain on of Stock				4,000
		(Sold 1,000 shares of the treasury stock at $20 per share) (a). On the basis of the explanation for each entry, prepare the entry that should have been made for the transactions. (b). Prepare the correcting entries that should be made to correct the accounts of Chetola Corporation. (Do not reverse the original entry.)

Answer rating: 100% (QA)

a Prepare the entries that should have been made as foll... View the full answer