Question

Selected transactions completed by Primo Discount Corporation during the current fiscal year are as follows:

Jan.	9	Split the common stock 3 for 1 and reduced the par from $75 to $25 per share. After the split, there were 1,150,500 common shares outstanding.
Feb.	28	Purchased 41,400 shares of the corporation’s own common stock at $28, recording the stock at cost.
May	1	Declared semiannual dividends of $0.80 on 74,100 shares of preferred stock and $0.12 on the common stock to stockholders of record on June 1, payable on July 10.
Jul.	10	Paid the cash dividends.
Sep.	7	Sold 29,000 shares of treasury stock at $33, receiving cash.
Oct.	1	Declared semiannual dividends of $0.80 on the preferred stock and $0.12 on the common stock (before the stock dividend). In addition, a 2% common stock dividend was declared on the common stock outstanding. The fair market value of the common stock is estimated at $36.
Dec.	1	Paid the cash dividends and issued the certificates for the common stock dividend.

Journalize the transactions. If no entry is required, simply skip to the next transaction. Refer to the Chart of Accounts for exact wording of account titles.

Chart of Accounts

CHART OF ACCOUNTS
Primo Discount Corporation
General Ledger
ASSETS 110 Cash 120 Accounts Receivable 131 Notes Receivable 132 Interest Receivable 141 Merchandise Inventory 145 Office Supplies 151 Prepaid Insurance 181 Land 193 Equipment 194 Accumulated Depreciation-Equipment LIABILITIES 210 Accounts Payable 221 Notes Payable 226 Interest Payable 231 Cash Dividends Payable 241 Salaries Payable 261 Mortgage Note Payable EQUITY 311 Common Stock 312 Paid-In Capital in Excess of Par-Common Stock 315 Treasury Stock 321 Preferred Stock 322 Paid-In Capital in Excess of Par-Preferred Stock 331 Paid-In Capital from Sale of Treasury Stock 340 Retained Earnings 350 Stock Dividends Distributable 351 Cash Dividends 352 Stock Dividends 390 Income Summary	REVENUE 410 Sales 610 Interest Revenue EXPENSES 510 Cost of Merchandise Sold 515 Credit Card Expense 520 Salaries Expense 531 Advertising Expense 532 Delivery Expense 533 Selling Expenses 534 Rent Expense 535 Insurance Expense 536 Office Supplies Expense 537 Organizational Expenses 562 Depreciation Expense-Equipment 590 Miscellaneous Expense 710 Interest Expense

Journal

Journalize the transactions. If no entry is required, simply skip to the next transaction. Refer to the Chart of Accounts for exact wording of account titles.

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JOURNAL

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Answer 1

Date	Description	Debit	Credit
Jan-09	No journal entry is necessary
Feb-28	Treasury stock (41,400 x $28)	$ 1,159,200.00
	Cash		$ 1,159,200.00
May-01	Cash dividends	$ 192,372.00
	Cash dividend payable		$ 192,372.00
	(74,100 x $0.80) + (1,109,100 x $0.12)
Jul-10	Cash dividend payable	$ 192,372.00
	Cash		$ 192,372.00
Sep-07	Cash (29,000 x $33)	$ 957,000.00
	Treasury stock (29,000*$28)		$ 812,000.00
	Paid in capital from sale of Treasury stock		$ 145,000.00
Oct-01	Cash dividends	$ 195,852.00
	Cash dividend payable		$ 195,852.00
	(74,100 x 1.20) + (1,138,100 x 0.12)
	Stock dividends (1,138,100 x 2% x $36)	$ 819,432.00
	Stock dividends distributable (1,138,100 x 2% x $25)		$ 569,050.00
	Paid in capital in excess of par – Common stock		$ 250,382.00
Dec-01	Cash dividend payable	$ 195,852.00
	Cash		$ 195,852.00
	Stock dividends distributable	$ 569,050.00
	Common stock		$ 569,050.00