PART A

During its first year of operations, the McCollum Corporation entered into the following transactions relating to shareholders’ equity. The corporation was authorized to issue 160 million common shares, $1 par per share.

Required:

Prepare the appropriate journal entries to record each transaction. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.)

Jan. 9 Issued 80 million common shares for $24 per share.

Mar. 11

Issued 5,600 shares in exchange for custom-made equipment. McCollum’s shares have traded recently on the stock exchange at $24 per share.

PART B

A new staff accountant for the McCollum Corporation recorded the following journal entries during the second year of operations. McCollum retires shares that it reacquires (restores their status to that of authorized but unissued shares)..

($ in millions)

Date General Journal Debit Credit

Jan. 12 Land 4

Paid-in capital—donation of land 4

Sept. 1 Common stock 2

Retained earnings 56

Cash 58

Dec. 1 Cash 30

Common stock 1

Gain on sale of previously issued shares 29

Required:

Prepare the journal entries that should have been recorded for each of the transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions (i.e., 10,000,000 should be entered as 10).)

ReferenceseBook & Resources

General JournalDifficulty: 1 EasyLearning Objective: 18-04 Record the issuance of shares when sold for cash and for noncash consideration.