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.

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answer///supply is elastic, and demand is inelastic;