Problem 11-5A Melvina Corporation has been authorized to issue 20,000 shares of

Question

Problem 11-5A

Melvina Corporation has been authorized to issue 20,000 shares of $100 par value, 8%, noncumulative preferred stock and 1,091,000 shares of no-par common stock.

The corporation assigned a $5 stated value to the common stock. At December 31, 2012, the ledger contained the following balances pertaining to stockholders’ equity.

The preferred stock was issued for $170,280 cash. All common stock issued was for cash. In November 4,020 shares of common stock were purchased for the treasury at a per share cost of $10. No dividends were declared in 2012.

Prepare the journal entries for the following. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Preferred Stock $149,900 Paid-in Capital in Excess of Par Value—Preferred Stock 20,380 Common Stock 2,130,000 Paid-in Capital in Excess of Stated Value—Common Stock 1,484,000 Treasury Stock—Common (4,020 shares) 40,200 Retained Earnings 84,300

Explanation / Answer

Problem 11-5A Melvina Corporation has been authorized to issue 20,000 shares of

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