Problem 15-1 On January 5, 2012, Phelps Corporation received a charter granting the right to issue 5,200 shares of $104 par value, 6% cumulative and nonparticipating preferred stock

Problem 15-1

On January 5, 2012, Phelps Corporation received a charter granting the right to issue 5,200 shares of $104 par value, 6% cumulative and nonparticipating preferred stock, and 50,800 shares of $10 par value common stock. It then completed these transactions.

Jan. 11

Issued 21,550 shares of common stock at $16 per share.

Feb. 1

Issued to Sanchez Corp. 4,800 shares of preferred stock for the following assets: equipment with a fair value of $55,510; a factory building with a fair value of $165,500; and land with an appraised value of $327,000.

July 29

Purchased 1,860 shares of common stock at $18 per share. (Use cost method.)

Aug. 10

Sold the 1,860 treasury shares at $12 per share.

Dec. 31

Declared a $0.35 per share cash dividend on the common stock and declared the preferred dividend.

Dec. 31

Closed the Income Summary account. There was a $176,310 net income.

(a) Record the journal entries for the transactions listed above. (Round answers to 0 decimal places, e.g. 125. If no entry is required, select “No Entry” for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record entries in the order displayed in the problem statement.)

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