Answer:
Explanation:
The journal entries are shown below:
1. Cash A/c Dr $292,500
To Common Stock $78,000 (78,000 × $1)
To Additional Paid-in Capital in excess of par - Common Stock $214,500
(Being the issue of the stock is recorded and the balance remaining is credited to the additional paid-in capital account)
2. Cash A/c Dr $260,000 (2,500 shares × $104)
To Preferred stock $250,000 (2,500 shares × $100)
To Additional Paid-in Capital in excess of par - Preferred Stock $10,000
(Being the issue of the stock is recorded and the balance remaining is credited to the additional paid-in capital account)
3. Treasury stock A/c Dr $7,100
To Cash A/c $7,100
(Being the treasury stock is purchased for cash)
