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Goodings, Inc. has two classes of stock authorized: 8%, $20 par value preferred and $1 par...

Goodings, Inc. has two classes of stock authorized: 8%, $20 par value preferred and $1 par value common. The following transactions affect stockholders' equity during 2018, its first year of operations:

February 2 - Issue 1 million shares of common stock for $20 per share.

February 4 Issue 50,000 shares of preferred stock for $21 per share.

June 15 Purchase 100,000 shares of its own common stock for $18 per share.

August 15 Reissue 75,000 shares of treasury stock for $23 per share.

November 1 Declare a cash dividend on its preferred stock and a $1 per share cash dividend on its common stock to all stockholders on record on November 15.

November 30 Pay the dividends declared on November 1.

Record the journal entry for each of these transactions.

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Expert Solution

Date Accounting titles and Explanations Debit Credit
Feb Cash (1,000,000*20)=            20,000,000
Common Stock (1,000,000*1) 1,000,000
paid in capital in excess of par 19,000,000
4-Feb Cash (50,000*21)              1,050,000
Preferred Stock (50,000*20)             1,000,000
paid in capital in excess of par                   50,000
15-Jun Treasusry stock 1800000
cash (100,000*18) 1800000
15-Aug Cash (75000*23) 1725000
Treasury stock (75000*18) 1350000
paid in excess on Treasury stock (75000*5) 375000
1-Nov Cash dividend/Retained earnings 1,055,000
Dividends payable - preferred (50,000*20*8%) 80000
Dividends payable - common (975000*1) 975,000
30-Nov Dividends payable -preferred 80,000
Dividends payable - common 975,000
cash 1,055,000

ekkarill92 answered 1 year ago
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