create journal entries: Common stock—$10 par value, 100,000 shares authorized, 55,000 shares issued and outstanding $...

create journal entries: Common stock—$10 par value, 100,000 shares authorized, 55,000 shares issued and outstanding $ 550,000 Paid-in capital in excess of par value, common stock 80,000 Retained earnings 460,000 Total stockholders’ equity $ 1,090,000 In year 2016, the following transactions affected its stockholders’ equity accounts. Jan. 1 Purchased 5,000 shares of its own stock at $20 cash per share. Jan. 5 Directors declared a $4 per share cash dividend payable on Feb. 28 to the Feb. 5 stockholders of record. Feb. 28 Paid the dividend declared on January 5. July 6 Sold 1,875 of its treasury shares at $24 cash per share. Aug. 22 Sold 3,125 of its treasury shares at $17 cash per share. Sept. 5 Directors declared a $4 per share cash dividend payable on October 28 to the September 25 stockholders of record. Oct. 28 Paid the dividend declared on September 5. Dec. 31 Closed the $408,000 credit balance (from net income) in the Income Summary account to Retained Earnings.

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Date	General Journal	Debit	Credit
1-Jan	Treasury stock, Common (5000x20)	100000
	Cash		100000
	(To record the purchase of own stock)

5-Jan	Retained earnings (55000-5000)*4	200000
	Common dividend payable		200000
	(To record the declaration of dividend)

28-Feb	Common dividend payable	200000
	Cash		200000
	(To record the payment of dividend)

6-Jul	Cash (1875*24)	45000
	Treasury stock, Common (1875*20)		37500
	Paid-In capital, Treasury stock (1875*4)		7500
	(To record the sale of treasury stock)

22-Aug	Cash (3125*17)	53125
	Paid-In capital, Treasury stock	7500
	Retained earnings	1875
	Treasury stock, Common ((3125*20)		62500
	(To record the sale of treasury stock)

5-Sep	Retained earnings	220000
	Common dividend payable (55000*4)		220000
	(To record the declaration of dividend)

28-Oct	Common dividend payable	220000
	Cash		220000
	(To record the payment of dividend)

31-Dec	Income summary	408000
	Retained earnings		408000
	(To close Income Summary account to Retained Earnings.)

ekkarill92 answered 1 year ago

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