Question

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.)

Answer 1

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