Question

Comprehensive Problem 4
Part 1:

Selected transactions completed by Equinox Products Inc. during the fiscal year ended December 31, 20Y8, were as follows:

1. Journalize the selected transactions.

If no entry is required, select "No entry required" from the dropdown and leave the amount boxes blank. For a compound transaction, if an amount box does not require an entry, leave it blank.

CHART OF ACCOUNTS:

CASH

COMMON STOCK

PAID IN CAPITAL IN EXCESS OF PAR-COMMON STOCK

RETAINED EARNINGS

NO ENTRY REQUIRED

TREASURY STOCK

BONDS PAYABLE

PREFERED STOCK

PREMIUM ON BONDS PAYABLE

CASH DIVIDENDS PAYABLE

CASH DIVIDENDS

PAIN IN CAPITAL FROM SALES OF TRESURY STOCK

STOCK DIVIDENDS

STOCK DIVIDENDS DISTRIBUTABLE

DIVIDENDS REVENUE

DISCOUNT ON BONDS PAYABLE

INTEREST EXPENSE

a. Issued 15,000 shares of $20 par common stock at $30, receiving cash.

Description	Debit	Credit
Cash
Common Stock
Paid-In Capital in Excess of Par-Common Stock

b. Issued 4,000 shares of $80 par preferred 5% stock at $100, receiving cash.

Description	Debit	Credit
Cash
Preferred Stock
Paid-In Capital in Excess of Par-Preferred Stock

c. Issued $500,000 of 10-year, 5% bonds at 104, with interest payable semiannually.

Description	Debit	Credit
Cash
Bonds Payable
Premium on Bonds Payable

d. Declared a quarterly dividend of $0.50 per share on common stock and $1.00 per share on preferred stock. On the date of record, 100,000 shares of common stock were outstanding, no treasury shares were held, and 20,000 shares of preferred stock were outstanding. Journalize the common stock and the preferred stock entries separately.

Description	Debit	Credit
Cash Dividends
Cash Dividends Payable
Common stock
Cash Dividends
Cash Dividends Payable
Preferred stock

e. Paid the cash dividends declared in (d).

Description	Debit	Credit
Cash Dividends Payable
Cash

f. Purchased 8,000 shares of treasury common stock at $33 per share.

Description	Debit	Credit
Treasury Stock
Cash

g. Declared a $1.00 quarterly cash dividend per share on preferred stock. On the date of record, 20,000 shares of preferred stock had been issued.

Description	Debit	Credit
Cash

h. Paid the cash dividends to the preferred stockholders.

Description	Debit	Credit
Common Stock
Cash

i. Sold, at $38 per share, 2,600 shares of treasury common stock purchased in (f).

Description	Debit	Credit
Cash
Treasury Stock
Paid-In Capital from Sale of Treasury Stock

j. Recorded the payment of semiannual interest on the bonds issued in (c) and the amortization of the premium for six months. The amortization is determined using the straight-line method.

Description	Debit	Credit

Answer 1

a	Description	Debit	Credit
	Cash	450000
	Common Stock		300000
	Paid-In Capital in Excess of Par-Common Stock		150000
b	Description	Debit	Credit
	Cash	400000
	Preferred Stock		320000
	Paid-In Capital in Excess of Par-Preferred Stock		80000
c	Description	Debit	Credit
	Cash	520000
	Bonds Payable		500000
	Premium on Bonds Payable		20000
d	Description	Debit	Credit
	Cash Dividends	50000
	Cash Dividends Payable		50000
	Common stock
	Cash Dividends	20000
	Cash Dividends Payable		20000
	Preferred stock
e	Description	Debit	Credit
	Cash Dividends Payable	70000
	Cash		70000
f	Description	Debit	Credit
	Treasury Stock	264000
	Cash		264000
g	Description	Debit	Credit
	Cash Dividends	20000
	Cash Dividends Payable		20000
	Preferred stock
h	Description	Debit	Credit
	Cash Dividends Payable	20000
	Cash		20000
i	Description	Debit	Credit
	Cash	98800
	Treasury Stock		85800
	Paid-In Capital from Sale of Treasury Stock		13000
j	Description	Debit	Credit
	Interest expense	24000
	Premium on bond	1000
	Cash		25000