Question

During its first year of operations, Cupola Fan Corporation issued 37,000 of $1 par Class B shares for $420,000 on June 30, 2018. Share issue costs were $2,200. One year from the issue date (July 1, 2019), the corporation retired 10% of the shares for $43,000.

Required:
1. to 4. Prepare the journal entry to record the issuance of the shares, the declaration of a $2.70 per share dividend on December 1, 2018, the payment of the dividend on December 31, 2018 and the retirement of the shares. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

(Journal Entries):

Record the issuance of the shares.

Record the declaration of a $2.70 per share dividend on December 1, 2018.

Record the payment of the dividend on December 31, 2018.

Record the retirement of the shares.

Answer 1

1	Prepare the journal entry to record the issuance of the shares :
July 1, 2019		Debit	Credit
	Cash	$ 4,20,000.00
	Common stock (37,000 x $1)		$     37,000.00
	Paid-in capital-excess of par		$ 3,83,000.00
	Paid-in capital-excess of par	$       2,200.00
	Cash		$       2,200.00
	(stock issue costs)
2	Record the declaration of a $2.70 per share dividend on December 1, 2018.
December 1, 2018		Debit	Credit
	Retained earnings	$     99,900.00
	Dividend payable 37000*2.70		$     99,900.00
3	Record the payment of the dividend on December 31, 2018.	Debit	Credit
December 31, 2018	Dividend payable	$     99,900.00
	Cash		$     99,900.00
		Debit	Credit
July 1, 2019	Common stock [(10% x 37,000) x $1]	$       3,700.00
	Paid-in capital-excess of par (383000-2200)*10%	$     38,080.00
	Retained earnings	$       1,220.00
	Cash		$     43,000.00