Problem

Tarrant Corporation was organized this year to operate a financial consulting business. The charter authorized the following stock: common stock, par value $15 per share, 12,600 shares authorized. During the year, the following selected transactions were completed:

a. Sold and issued 5,800 shares of common stock for cash at $30 per share.

b. Sold and issued 2,800 shares of common stock for cash at $35 per share.

c. At year-end, the accounts reflected income of $7,200. No dividends were declared.

Required:

1. Prepare the journal entries required to record the sale of common stock in (a) and (b).
2. Prepare the stockholders' equity section as it should be reported on the year-end balance sheet.