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Journal entries, stockholders' equity section

Vanowski, Inc., was organized and authorized to issue 10,000 shares of $100 par value, 9 percent preferred stock and 100,000 shares of no-par, $5 stated value common stock on July1, 20xx. Stock-related transactions for Vanowski are as follows:

July 1: Issued 20,000 shares of common stock at $11 per share.
July 1: Issued 1,000 shares of common stock at $11 per share for services rendered in connection with the organization of the company.
July 2: Issued 2,000 shares of preferred stock at par value for cash.
Jul 10: Issued 5,000 shares of common stock for land on which the asking price was $70,000. Market value of the stock was $12. Management wishes to record the land at full market value of the stock.
August 2: Purchased 3,000 shares of its common stock at $13 per share.
August 10: Declared a cash dividend for on month on the outstanding preferred stock and $.02 per share on common stock outstanding payable on August 22 to stockholders of record on August 12.
August 12: Date of record for cash dividends.
August 22: Paid cash dividends.

Record transaction in journal form and prepare the stockholders' equity section of the balance sheet as it would appear on August 31, 20xx. Net income for July and August was $23,000.

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Solution Summary

The solution explains the journal entries and the preparation of stockholders' equity section of Balance Sheet