E15-9B (Correcting Entries for Equity Transactions) Global Air Inc. recently hired a new accountant with limited real-world experience in corporate accounting. Prior to starting the new job, the accountant was very busy and was unable to review any texts

E15-9B (Correcting Entries for Equity Transactions) Global Air Inc. recently hired a new accountant with limited real-world experience in corporate accounting. Prior to starting the new job, the accountant was very busy and was unable to review any texts on corporation accounting. During the first month, he made the following entries for the corporation’s capital stock.

Oct. 5 Cash 39,000

Capital Stock 1,000

Gain on Sale of Stock 38,000

(Issued 1,000 shares of $1 par value common

stock at $39 per share)

12 Cash 330,000

Capital Stock 330,000

(Issued 3,000 shares of $100 par value preferred

stock at $110 per share)

13 Capital Stock 20,000

Cash 20,000

(Purchased 500 shares of common stock for the

treasury at $40 per share)

26 Cash 22,500

Capital Stock 500

Gain on Sale of Stock 22,000

(Sold 500 shares of treasury stock at $45 per share)

Instructions

On the basis of the explanation for each entry, prepare the entries that should have been made for the

capital stock transactions.