The stockholders’ equity accounts of Whispering Winds Corp. on January 1, 2017, were as follows. Preferred...

The stockholders’ equity accounts of Whispering Winds Corp. on January 1, 2017, were as follows. Preferred Stock (7%, $100 par noncumulative, 4,650 shares authorized) $279,000 Common Stock ($5 stated value, 306,000 shares authorized) 1,274,999 Paid-in Capital in Excess of Par Value—Preferred Stock 13,950 Paid-in Capital in Excess of Stated Value—Common Stock 489,600 Retained Earnings 699,500 Treasury Stock (4,650 common shares) 37,200 During 2017, the corporation had the following transactions and events pertaining to its stockholders’ equity. Feb. 1 Issued 4,860 shares of common stock for $29,160. Mar. 20 Purchased 1,300 additional shares of common treasury stock at $8 per share. Oct. 1 Declared a 7% cash dividend on preferred stock, payable November 1. Nov. 1 Paid the dividend declared on October 1. Dec. 1 Declared a $0.70 per share cash dividend to common stockholders of record on December 15, payable December 31, 2017. Dec. 31 Determined that net income for the year was $277,400. Paid the dividend declared on December 1. Journalize the transactions. (Record entries in the order displayed in the problem statement. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 5,275.)

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Expert Solution

Journal entries
S.no.	Accounts title and explanations		Debit $	Credit $
01-Feb	Cash account			29160
	Common Stock capital (4860*5)		24300
	Paid in capital in excess of Statedvalue-Common	4860
	(for stock issued at premium)

20-Mar	Treasury stock (1300*8)		10400
	Cash account				10400
	(for purchase of treasury stock)

01-Oct	Preferred dividend			19530
	Pref. Dividend payable (2790*7)		19530
	(for dividend declared)

01-Nov	Pref. dividend payable		19530
	Cash account				19530
	(fo dividend paid )

01-Dec	Dividend account			1,77,737
	Dividend payable (253910*0.70)		1,77,737
	(for dividend declared)

Dec-31	Income summary			2,77,400
	Retained earnings				2,77,400
	(for net income)

Dec-31	Dividend payable			1,77,737
	Cash account				1,77,737
	(for dividend paid)

Note:
Stock outstanding:
Beginning shares issued(1274999/5)	255000
Add: issued			4860
Less: Total Treasury stock (4650+1300)	-5950
Shares outstanding			253910

ekkarill92 answered 1 year ago

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