Question

GOLDEN Corporation was organized on January 1, 2018. It is authorized to issue 22,000 shares of $3-noncumulative preferred shares and an unlimited number of common shares. The following share transactions were completed during the first year. Record the above transactions. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round average cost per share to 2 decimal places, e.g. 2.55 and answers to the nearest dollar e.g. 5,121. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.)

Jan.	1		Issued 78,000 common shares for cash at $3 per share.
Mar.	1		Issued 12,900 preferred shares for cash at $57 per share.
May	1		Issued 122,000 common shares for cash at $5 per share.
Sept.	1		Issued 4,900 common shares for cash at $6 per share.
Nov.	1		Issued 2,800 preferred shares for cash at $59 per share.
Dec.	1		Declared the annual preferred dividend to the preferred shareholders, to shareholders of record on December 15, payable on January 15, 2019.
Dec.	31		Reported net income of $150,000 for the year.

Answer 1

Journal Entries
Date	Particulars	Debit ($)	Credit ($)
1-Jan	Cash/Bank	234,000
	Discount on issue of Common Shares (78,000 x 2)	156,000
	Common Shares (78,000 x 3)		390,000
	(Being 78,000 commom shares issued for cash at 3 per share)
1-Mar	Cash/Bank	735,300
	Preferred Shares (12,900 x 3)		38,700
	Paid in excess of Par -Preferred Shares (12,900 x 54)		696,600
	(Being 12,900 preferred shares issued at a premium of $54 per share)
1-May	Cash/Bank	610,000
	Common Shares (122,000 x 5)		610,000
	(Being 122,000 common shares issued at par)
1-Sep	Cash/Bank	29,400
	Common Shares(4,900 x 5)		24,500
	Paid in excess of Par -Commom Shares (4,900 x 1)		4,900
	(Being 4,900 common shares issued at premium of $1 per share)
1-Nov	Cash/Bank	165,200
	Preferred Shares (2,800 x 3)		8,400
	Paid in excess of Par -Preferred Shares (2,800 x 56)		156,800
	(Being 2,800 preferred shares issued at a premium of $56 per share)
1-Dec	No Entry (Note-2)	0	0
31-Dec	No Entry (Note-3)	0	0

Note -

1.It is assumed that the par value of common shares is $5 per share .So, it has been construed that the Issue on 1st January is at a discount, issue on 1st May is at par and the issue on 1st September is at premium hence the corresponding entries.

2.Dividend expense is to be recognised only when the Dividend is paid and not when it was declared.Hence, no entry has been made for declaration of Dividend on 1st December.

3.Net Income is obtaining by reducing the income from the expenses that were recorded, hence no special entry is required for the same