Bird Inc. was organized and authorized to issue 5,000 shares of $100 par value, 9% preferred...

Bird Inc. was organized and authorized to issue 5,000 shares of $100 par value, 9% preferred stock and 50,000 shares of no par, $5 stated value common stock on July 1, 2017. Stock related transactions for Bird Inc. are as follows:

July 1 Issued 10,000 shares of common stock at $11 per share.

July 1 Issued 500 shares of common stock at $11 per share for services rendered in connection with the organization of the company.

July 2 Issued 1,000 shares of preferred stock at par value for cash.

July 10 Issued 2,500 shares of common stock for land. The transaction will be valued at the current market price of the stock, which is $12 per share.

Aug 2 Purchased 1,500 shares of its common stock at $13 per share.

Aug 10 Declared a $750 cash dividend on preferred stock and a $230 cash dividend on common stock.

Aug 12 Date of record for cash dividends Aug 22 Paid cash dividends

Instructions: Prepare journal entries to record these transactions

Expert Solution

In the Books of Bird Inc.
Journal Entries
Date	Particulars	Debit	Credit
1st July	Bank A/C Dr	110000
	To Share Capital A/C		50000
	To Security Reserve A/C		60000
	(Being 10000 shares issued @ $ 11)
1st July	Sundry Creditors A/C Dr	5500
	To Share Capital A/C		2500
	To Security Reserve A/C		3000
	(Being 10000 shares issued @ $ 11 for Services Rendred)
2nd July	Bank A/C Dr	100000
	To 9% Prefernce Share Capital A/C		100000
	(Being 1000 9% Prefernce shares issued @ $ 11)
10th July	Land (aseet) A/C Dr	30000
	To Share Capital A/C		12500
	To Security Reserve A/C		17500
	(Being 2500 shares issued @ $ 12 for Land)
2nd Aug	Share Buy Back A/C Dr	19500
	To Bank A/C		19500
	(Being 1500 Share Bought Back @ 13each)
2nd Aug	Share Capital A/C Dr	7500
	Security Reserve A/C	12000
	To Share Buy Back A/C Dr		19500
	(Being 1500 Share Bought Back @ 13each)
10th Aug	Dividend A/C Dr	750
	To Dividend Payable A/C		750
	( Being Divident Declared to pay $ 750 to Prefernce Stock)
10th Aug	Dividend A/C Dr	230
	To Dividend Payable A/C		230
	( Being Divident Declared to pay $ 230 to Common Stock)
22nd Aug	Dividend Payable A/C Dr	980
	To Bank A/C		980
	( Being Divident paid $ 230 to Common Stock and $ 750 to Prefence Stock)
Total		286460	286460

ekkarill92 answered 1 year ago

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