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Choctaw Co. completed the following transactions in 2016, the first year of operation:    1. Issued...

Choctaw Co. completed the following transactions in 2016, the first year of operation:

  

1. Issued 35,000 shares of $10 par common stock for $10 per share.
2. Issued 4,500 shares of $20 stated value preferred stock for $20 per share.
3. Purchased 2,500 shares of common stock as treasury stock for $12 per share.
4. Declared a $3,500 cash dividend on preferred stock.
5. Sold 1,200 shares of treasury stock for $14 per share.
6. Paid $3,500 cash for the preferred dividend declared in Event 4.
7. Earned cash revenues of $108,000 and incurred cash expenses of $56,000.
8. Closed revenue, expense, and dividend accounts to the retained earnings account.
9. Appropriated $9,500 of retained earnings.


Required:
a.

Prepare journal entries to record these transactions and post them to T-accounts. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermediate calculations.)

Solutions

Expert Solution

Choctaw Co.
General journal for the year ended December 31, 2016
Event Account Title Debit Credit
1 Cash 350000
Common Stock 350000
(Issue of 35,000 shares of $10 par common stock at $10 per share)
2 Cash 90000
Preferred Stock 90000
(Issue of 4,500 shares of $20 par preferred stock for $20 per share)
3 Treasury Stock 30000
Cash 30000
(Purchase of 2,500 shares of own stock @12 per share)
4 Cash Dividend 3500
Dividend Payable 3500
(Cash dividend declared)
5 Cash 16800
APIC - Treasury Stock 2400
Treasury Stock 14400
(Sale of 1,200 shares of treasury @$14 per share)
6 Dividend Payable 3500
Cash 3500
(Payment of cash dividend declared earlier)
7 Cash 52000
Expenses 56000
Revenues 108000
(Cash reveunes and cash expenses recorded)
8 Revenues 108000
Expenses 56000
Retained Earnings 52000
(Revenues and expenses closed to retained earnings)
Retained Earnings 3500
Cash dividend 3500
(dividend account closed to retained earnings)
9 Retained Earnings 9500
Appropriation Account 9500
(Appropriation of Retained Earnings)
Common Stock Preferred Stock
Event Debit Event Credit Event Debit Event Credit
1 350000 2 90000
0 350000 0 90000
End.Bal. 350000 End.Bal. 90000
Retained Earnings Treasury Stock
Event Debit Event Credit Event Debit Event Credit
7 56000 8 108000 3 30000 5 14400
8 3500
9 9500
69000 108000 30000 14400
End.Bal. 39000 End.Bal. 15600
Cash Dividend Dividend Payable
Event Debit Event Credit Event Debit Event Credit
4 3500 8 3500 6 3500 4 3500
Cash Revenues
Event Debit Event Credit Event Debit Event Credit
1 350000 3 30000 8 108000 7 108000
2 90000 7 56000
5 16800
7 108000 Appropriation Acoount
564800 86000 Event Debit Event Credit
End.bal. 478800 9 9500
0 9500
End.Bal. 9500
Expenses
Event Debit Event Credit
7 56000 8 56000

ekkarill92 answered 1 year ago
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