Waco Wireless needed additional capital to expand, so the business incorporated. The charter from the state of Georgia authorizes Waco to issue 80,000 shares of 10%, $100 par value cumulative preferred stock, and 120,000 shares of $3 par value common stock. During the first month, Waco completed the following transactions:
Oct. 2 Issued 20,000 shares of common stock for a building with a market value of $150,000.
6 Issued 750 shares of preferred stock for $120 per share.
9 Issued 15,000 shares of common stock for cash of $60,000.
10 Declared a $20,000 cash dividend for stockholders of record on Oct. 20. Use a separate Dividends Payable account for preferred and common stock.
25 Paid the cash dividend.
Requirements
1. Record the transactions in the general journal.
2. Prepare the stockholders’ equity section of Waco’s balance sheet at October 31, 2016. Assume Waco’s net income for the month was $91,000.