Problem:
During its second year of operations, Panzarella Corporation entered into several transactions relating to shareholders' equity. The articles of incorporation authorized the issue of 7,000,000 common shares, $2.50 par per share, and 900,000 preferred shares, $30.00 par per share. Its balance sheet at December 31 of the prior year follows. Panzarella Company Shareholders' Equity Section December 31, Prior Year Paid-in Capital: Common stock $ 3,500,000 Paid-in capital - excess of par, common 4,200,000 Total paid-in capital $ 7,700,000 Retained earnings 1,155,000 Total shareholders' equity $ 8,855,000 Required: Prepare the appropriate journal entry for each of the following transactions: February 1 Sold 1,750,000 common shares for $15.00 per share. April 1 Reacquired 35,000 common shares to be held in treasury at $17.00 per share. May 1 Sold 7,000 of its treasury shares for $18.70 per share. September 1 Sold 10,500 of its treasury shares for $13.60 per share. Prepare the shareholders' equity section of the December 31 balance sheet for the current year ended December 31. Navigation: Use the Open Excel in New Tab button to launch this question.