Prepare entry that should have been made for transactions

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Reference no: EM13527326

Flores Corporation recently hired a new accountant with extensive experience in accounting for partnerships. Because of the pressure of the new job, the accountant was unable to review his textbooks on the topic of corporation accounting. During the first month, the accountant made the following entries for the corporation's capital stock.

May 2

Cash

Capital Stock

(Issued 10,000 shares of $10 par value common stock at $12 per share)

120,000



120,000

10

Cash

Capital Stock

(Issued 10,000 shares of $50 par value preferred stock at $60 per share)

600,000



600,000

15

Capital Stock

Cash

(Purchased 1,000 shares of common stock for the treasury at $14 per share)

14,000


14,000

31

Cash

Capital Stock

Gain on Sale of Stock

(Sold 500 shares of treasury stock at $16 per share)

8,000



5,000

3,000

Instructions

On the basis of the explanation for each entry, prepare the entry that should have been made for the capital stock transactions.

Reference no: EM13527326

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