Question

On January 1, 2019, Jonathan Corporation had 75,000 shares of $1 par value common stock issued and outstanding. During the year, the following transactions occurred:

Mar 1: Issued 30,000 shares, not previously issued of common stock for $575,000

June 1: Declared a cash dividend of $1.00 per share to stockholders of record on June 15

June 30: Paid the $1.00 cash dividend

July 1: Declared and issued a 10% stock dividend

Dec 1: Purchased 5,000 shares of common stock for the treasury for $15 per share

Dec 10: Sold 100 treasury stock of $16 per share

Dec 15: Declared a cash dividend on outstanding shares of $1.00 per share to stockholders of record on December 31

Instructions: Prepare journal entries to record the above transactions

Answer 1

Journal entries

Date	account and explanation	debit	Credit
Mar 1	Cash	$575,000
	Common Stock		$30,000
	Paid in Capital in excess of par value-Common Stock		$545,000
	(To record common stock)
June 1	Cash dividend (75,000 + 30,000) (105000*2)= $210,000	$210,000
	Dividend payable		$210,000
	(To record dividend declared)
June 30	Dividend payable	$210,000
	Cash		$210,000
	(To record dividend paid)
Dec 1	Treasury stock (5000*15)	$75,000
	Cash		$75,000
	(To record purchase treasury stock)
Dec 15	Cash dividend (70000*$1.00)	$70,000
	Dividend payable		$70,000
	(To record dividend declared)
	Note :
	dividend on 15th December on 75,000  - 5,000 treasury stock)
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