Answer:
Issuance
Common Stock
Dr. Cash $1,260,000
Cr. Common Stock $180,000
Cr. Paid-in-Capital excess of par common stock $1,080,000
Preferred Stock
Dr. Cash $765,000
Cr. Preferred Stock $270,000
Cr. Paid-in-Capital excess of par Preferred stock $495,000
Treasury Stock Purchase
Dr. Treasury Stock $46,000
Cr. Cash $46,000
Explanation:
Common Shares are issued at a specified price, we need to record the par value of the share in common stock account and The value excess of par in the Paid-in-Capital Excess of par common stock separately.
Issuance of 60,000 shares
Par value = $60,000 x 3 = $180,000
Excess of par value = ($21 - $3 ) x 60,000 = $1,080,000
Preferred stock has also recorded same as the common but in different accounts
Par Value = 9,000 x $30 = $270,000
Excess of par value = ($85 - $30) x 9,000 = $495,000
Treasury stocks are the company's own shares which is repurchased by the company. It is recorded in treasury shares account which is an contra equity account. I can be reissued or cancelled by the company.
Purchase of Treasury Stock
Treasury Stock = 2,000 x $23 = $46,000
