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Randy Company has 600,000 shares of common stock outstanding. Each share of common stock has a...
Randy Company has 600,000 shares of common stock outstanding. Each share of common stock has a par value of $10. Please prepare journal entries to record the following INDEPENDENT transactions:
1. Randy’s directors declare a 10% stock dividend on September 1, 2019. On that date, the stock is trading on the market at $30 per share.
2. Randy purchases 1,000 of its outstanding shares on January 10, 2019 for $20 per share.
3. On April 1, 2019, Randy reissues 2,000 treasury shares for $40 share. The shares were previously purchased in 2017 for $30 per share. There is no balance in the APIC-Treasury Stock account.
4. Randy issues 20,000 additional shares on September 1, 2019 for $50 per share.
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Expert Solution
| Journal entries | ||||||
| S.no. | Accounts title and explanations | Debit $ | Credit $ | |||
| a. | Retained earnings (60,000 shares @30) | 1800000 | ||||
| Stock dividend distributable | (60000*10) | 6,00,000 | ||||
| Additional Paid in capital | 12,00,000 | |||||
| (for declaration of stock dividend) | ||||||
| b. | Treasury stock (1000 shares @ 20) | 20,000 | ||||
| Cash account | 20,000 | |||||
| (for treasury stock purchased) | ||||||
| c. | Cash account (2000*40) | 80000 | ||||
| Treasury stock (2000*30) | 60000 | |||||
| Additional Paid in capital-Treasury stock | 20000 | |||||
| (for reissue of treasury stock) | ||||||
| d. | Cash account (20000*50) | 1000000 | ||||
| Common Stock capital (20000*10) | 200000 | |||||
| Additionl Paid in capital | 800000 | |||||
| (for issue of stock) | ||||||
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