provide an example of the following accounts that should be closed, in the

form of a journal entry. 

 

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ABC Inc. was incorporated on 1/15/12. Their corporate charter authorized the following capital

stock:

 Preferred Stock: 7%, par value $100 per share, 100,000 shares.

 Common Stock: $1 par value, 500,000 shares.

The following transactions occurred during the year:

1/19/12 – Issued 100,000 shares of common stock for $17 cash per share.

1/31/12 – Issued 3,000 shares of preferred stock for $115 cash per share.

11/1/12 – Repurchased 30,000 shares of common stock for $22 cash per share.

11/20/12- Resold 15,000 shares of common stock purchased on 11/1, at $23 per share.

11/28/12 Resold the remaining 15,000 shares of common stock purchased on 11/1 at $4 per share.

12/1/12 – Declared total dividend of common stock only for $95,000. 

Required: 

1. Prepare the journal entry for each transaction listed above.

2. explain the main differences between common and preferred stock.

 

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