In: Accounting
ONLY NEED LETTER J
ONLY NEED LETTER J
Comprehensive Problem 4
Part 1:
Selected transactions completed by Equinox Products Inc. during the fiscal year ended December 31, 20Y8, were as follows:
1. Journalize the selected transactions.
If no entry is required, select "No entry required" from the dropdown and leave the amount boxes blank. For a compound transaction, if an amount box does not require an entry, leave it blank.
a. Issued 15,000 shares of $20 par common stock at $30, receiving cash.
Description | Debit | Credit |
---|---|---|
Cash | ||
Common Stock | ||
Paid-In Capital in Excess of Par-Common Stock |
b. Issued 4,000 shares of $80 par preferred 5% stock at $100, receiving cash.
Description | Debit | Credit |
---|---|---|
Cash | ||
Preferred Stock | ||
Paid-In Capital in Excess of Par-Preferred Stock |
c. Issued $500,000 of 10-year, 5% bonds at 104, with interest payable semiannually.
Description | Debit | Credit |
---|---|---|
Cash | ||
Bonds Payable | ||
Premium on Bonds Payable |
d. Declared a quarterly dividend of $0.50 per share on common stock and $1.00 per share on preferred stock. On the date of record, 100,000 shares of common stock were outstanding, no treasury shares were held, and 20,000 shares of preferred stock were outstanding. Journalize the common stock and the preferred stock entries separately.
Description | Debit | Credit |
---|---|---|
Cash Dividends | ||
Cash Dividends Payable | ||
Common stock | ||
Cash Dividends | ||
Cash Dividends Payable | ||
Preferred stock |
e. Paid the cash dividends declared in (d).
Description | Debit | Credit |
---|---|---|
Cash Dividends Payable | ||
Cash |
f. Purchased 8,000 shares of treasury common stock at $33 per share.
Description | Debit | Credit |
---|---|---|
Treasury Stock | ||
Cash |
g. Declared a $1.00 quarterly cash dividend per share on preferred stock. On the date of record, 20,000 shares of preferred stock had been issued.
Description | Debit | Credit |
---|---|---|
Cash Dividends | ||
Cash Dividends Payable |
h. Paid the cash dividends to the preferred stockholders.
Description | Debit | Credit |
---|---|---|
Cash Dividends Payable | ||
Cash |
i. Sold, at $38 per share, 2,600 shares of treasury common stock purchased in (f).
Description | Debit | Credit |
---|---|---|
Cash | ||
Treasury Stock | ||
Paid-In Capital from Sale of Treasury Stock |
j. Recorded the payment of semiannual interest on the bonds issued in (c) and the amortization of the premium for six months. The amortization is determined using the straight-line method.
Description | Debit | Credit |
---|---|---|
Interest Expense | ||
Premium on Bonds Payable | ||
Cash |
Description | Debit | Credit | |
a. | Cash (15,000 x $30) | $450,000 | |
Common stock (15,000 x $20) | $300,000 | ||
Paid-In Capital in Excess of Par-Common Stock(15000 x $10) | $150,000 | ||
b. | Cash (4,000 x $100) | $400,000 | |
Preferred stock (4,000 x $80) | $320,000 | ||
Paid-In Capital in Excess of Par-Preferred Stock (4,000 x $20) | $80,000 | ||
c. | Cash | $520,000 | |
Bonds Payable | $500,000 | ||
Pemium on Bonds Payable | $20,000 | ||
d. | Cash Dividends ($0.50 x 100,000) | $50,000 | |
Cash Dividends Payable ($0.50 x 100,000) | $50,000 | ||
(Common stock) | |||
Cash Dividends ($1 x 20,000) | $20,000 | ||
Cash Dividends Payable ($1 x 20,000) | $20,000 | ||
(Preferred stock) | |||
e. | Cash Dividends Payable | $70,000 | |
Cash Dividends | $70,000 | ||
f. | Treasury stock (8,000 x $33) | $264,000 | |
Cash (8,000 x $33) | $264,000 | ||
g. | Cash Dividends ($1 x 20,000) | $20,000 | |
Cash Dividends Payable | $20,000 | ||
h. | Cash Dividends Payable | $20,000 | |
Cash Dividends | $20,000 | ||
i. | Cash (2,600 x $38) | $98,800 | |
Treasury stock (2,600 x $33) | $85,800 | ||
Paid-in capital from sale of Treasury stock (2,600 x $5) | $13,000 | ||
j. | Interest Expense | $11,500 | |
Premium on Bonds Payable [$20,000 / (10x2)] | $1,000 | ||
Cash ($500,000 x .05 / 2) | $12,500 |
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