Crane Company had these transactions during the current period. June 12 Issued 87,000 shares of $1 par value common stock for cash of $326,250. July 11 Issued 2,800 shares of $101 par value preferred stock for cash at $107 per share. Nov. 28 Purchased 3,450 shares of treasury stock for $8,250. Prepare the journal entries for the Crane Company transactions shown above.

See the explanation below:

Explanation:

Crane Company

Date Details DR ($) CR ($)

June 12: Cash 326,250

Common stock 87,000

Share Premium - Common stock (1) 239,250

Being the issue of common stock at a premium.

June 11: Cash 299,600

Preferred stock (2) 282,800

Share premium - Preferred stock (3) 16,800

Being the issue of preferred stock at a premium.

Nov. 28 Treasury stock 3,450

Common stock (4) 4,800

Cash 8,250

Being a purchase of treasury stock at more than per value.

Note:

(1) Share Premium - Common stock = 326,250 - 87,000 = 239,250

(2) Preferred stock = 2,800 * $101 = 282,800

(3) Share premium - Preferred stock = (107 - 101) * 2,800 = 16,800

(4) Common stock = 8,250 - 3450 = 4,800 when the par value method is used instead of cash method.