Question

Please make the journal entries for these transactions:
A brand new company issued 30,000 shares of common stock. The company received $25 per share from the investors, and the par value is $5 per share.
The company declared a cash dividend of $7,000.
Two weeks later, the company paid the $7,000 dividend to the stockholders.
The company bought back 3,000 shares of common stock from some stockholders for $40 per share.
The company sold back to investors 2,000 of the shares it bought back in transaction #4 for $47 per share.
The company sold back to investors 1,000 of the shares it bought back in transaction #4 for $37 per share.

Answer 1

S.NO.	PARTICULARS	L.F.	DR.	CR.
1.	Bank A/c	Dr	$7,50,000
	To Share Capital A/c			$1,50,000
	To Security Premium A/c			$6,00,000
	(Being share capital issued)
2.	Reserves A/c	Dr	$7,000
	To Dividend Payable A/c			$7,000
	(Being dividend declared)
3.	Dividend Payable A/c	Dr	$7,000
	To Bank A/c			$7,000
	(Being dividend paid)
4.	Equity Share Capital A/c	Dr	$15,000
	Security Premium A/c	Dr	$1,05,000
	To Equity Shareholder A/c			$1,20,000
	(Being buy back of shares)
	General Reserve A/c	Dr	$15,000
	To Capital Redemption Reserve A/c			$15,000
	(Being amount transferred to CRR)
5.	Bank A/c	Dr	$94,000
	To Share Premium A/c			$84,000
	To Share Capital A/c			$10,000
	(Being shares sold at premium by company)
6.	Bank A/c	Dr	$37,000
	To Security Premium A/c			$32,000
	To Share Capital A/c			$5,000
	(Being shares sold at premium by company)