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Bailey Corporation issued 10,000 shares of no par common stock for $25 per share. Bailey also issued 3,000 shares of $40 par, 6 percent noncumulative preferred stock at $42 per share.
Required:
a. Record these events in a horizontal statements model like the following one. In the cash flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). Use NA to indicate that an element was not affected by the event.
b. Prepare journal entries to record these transactions.
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