Reference no: EM132843877

Presented below is information related to Redding Company:

1. The company is granted a charter that authorizes issuance of 35,000 shares of $10 par value, 7% cumulative preferred stock and 100,000 shares of no-par common stock. The board established a stated value of $10 per share for the common stock.

2. 12,000 shares of common stock are issued to the founders of the company for a patent valued by the board of directors at $400,000.

3. 6,000 shares of preferred stock are sold for cash at $50 per share.

4. The company issues 200 shares of common stock to its attorneys for costs associated with starting the company. At that time, the common stock was selling at $60 per share.

Instructions:

Problem (a) Prepare the general journal entries necessary to record each of these transactions. If no entry is required, please indicate as such.

Problem (b) Prepare the Stockholder's Equity section of the balance sheet after the recording of the above transactions.