Problem

Layes Corporation has been authorized to issue 20,000 shares of $100 par value, 7%, noncumulative preferred stock and 1,000,000 shares of no-par common stock. The corporation assigned a $5 stated value to the common stock.

At December 31, 2017, the ledger contained the following balances pertaining to stockholders' equity.

Preferred Stock $ 150,000 Paid-in Capital in Excess of Par Value-Preferred Stock 20,000 Common Stock 2,000,000 Paid-in Capital in Excess of Stated Value-Common Stock 1,520,000 Treasury Stock (4,000 common shares) 36,000 Retained Earnings 82,000 Accumulated Other Comprehensive Income 51,000 The preferred stock was issued for $170,000 cash. All common stock issued was for cash. In November 4,000 shares of common stock were purchased for the treasury at a per share cost of $9. No dividends were declared in 2017. Instructions (a) Prepare the journal entries for the following.

1. Issuance of preferred stock for cash.

2. Issuance of common stock for cash. 3.Purchase of common treasury stock for cash.

(b) Prepare the stockholders' equity section of the balance sheet at December 31, 2017.

Tot. stockholders' equity $3,787,000.