Question

1. Argo Wireless needed additional capital to expand its operations, so the business incorporated. Argo Wireless is authorized to issue 50,000 shares of 8%, $50 par value preferred stock and 160,000 shares of $4 par value common stock. During its first year, Argo Wireless had the following transactions:

Jan. 2           Issued 19,000 shares of common stock for $6 per share.

Jan. 6           Issued 600 shares of preferred stock for $140 per share.

Jan. 10         Split common stock 2-for-1.

Mar 5           Purchased 1,000 shares of treasury stock for $8 per share.

Jul. 30          Declared a $2,400 cash dividend on preferred stock and a $1 per share cash dividend on common stock for stockholders of record on Aug 31.

Sep. 1           Paid the cash dividend.

Oct. 26         Sold 500 shares of treasury stock for $10 per share.

Nov. 30        Sold 300 shares of treasury stock for $4 per share.

Record the transactions for Argo Wireless.

Answer 1

Date	Journal Entry	Debit	Credit
Jan-2	Cash	$ 114,000
	Share Premium on Common Stock		$        38,000
	Common Stock		$        76,000
	(19000 common Share issued @ 6 per share)
Jan-6	Cash	$    84,000
	Share Premium on Preferred Stock		$        54,000
	Prefered Stock		$        30,000
	(600 prefered Share issued @ 140 per share)
Jan-10	19000 Common stock at 4 par value converted into 38000 common stock at 2 par value
	( Split 2 for 1 )
Mar-5	Treasury Stock	$      8,000
	Cash		$           8,000
	(1000 Common Stock buy @ 8)
Jul-30	Retained Earnings	$    20,400
	Dividend Payable to Preferred Stock		$           2,400
	Dividend Payable to Common Stock		$        18,000
	(Dividend declared)
Sep-1	Dividend Payable to Preferred Stock	$      2,400
	Dividend Payable to Common Stock	$    18,000
	Cash		$        20,400
	(Dividend Paid)
Oct-26	Cash	$      5,000
	Treasury Stock		$           4,000
	Additional paid in capital -treasury stock		$           1,000
	(500 Treasury Stock sold @ 10 )
Nov-30	Cash	$      1,200
	Additional paid in capital -treasury stock	$      1,200
	Treasury Stock		$           2,400
	(300 Treasury Stock sold @ 4 )