E3-7 Art Wyatt Corporation recently hired a new accountant with extensive experience in accounting for partnerships. Because of the pressure of the new job, the accountant was unable to review what he had learned earlier about corporation accounting. During the first month, the accountant made the following entries for the corporation's capital stock.
Please see the attached file for full problem description.
On the basis of the explanation for each entry, prepare the entry that should have been made for the capital stock transactions.
Here are your entries:
DR: Cash 144,000
CR: Gain on sale of Capital stock 84,000
CR: Capital stock 60,000
DR: Cash 60,000
CR: Gain on sale of Capital ...
This question involves the fundamentals of accounting