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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)

ekkarill92 answered 3 years ago
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