Question

Exercise 15-18 (Part Level Submission) Headland Company reported the following amounts in the stockholders’ equity section of its December 31, 2016, balance sheet. Preferred stock, 10%, $100 par (10,000 shares authorized, 1,800 shares issued) $180,000 Common stock, $5 par (94,000 shares authorized, 18,800 shares issued) 94,000 Additional paid-in capital 131,000 Retained earnings 478,000 Total $883,000 During 2017, Headland took part in the following transactions concerning stockholders’ equity. 1. Paid the annual 2016 $10 per share dividend on preferred stock and a $2 per share dividend on common stock. These dividends had been declared on December 31, 2016. 2. Purchased 1,500 shares of its own outstanding common stock for $43 per share. Headland uses the cost method. 3. Reissued 800 treasury shares for land valued at $36,200. 4. Issued 540 shares of preferred stock at $104 per share. 5. Declared a 10% stock dividend on the outstanding common stock when the stock is selling for $41 per share. 6. Issued the stock dividend. 7. Declared the annual 2017 $10 per share dividend on preferred stock and the $2 per share dividend on common stock. These dividends are payable in 2018. Collapse question part (a) Prepare journal entries to record the transactions described above. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) No. Account Titles and Explanation Debit Credit 1. 2. 3. 4. 5. 6. 7.

Answer 1

Ref	Account	Debit	Credit
1	Dividend distributable on preferred stock	18,000			=1800*10
	Dividend distributable on common stock	37,600			=18800*2
	Cash		55,600
2	Treasury stock	64,500
	Cash		64,500
3	Land	36,200
	Treasury stock		34,400		=800*43
	Paid in capital treasury stock		1,800
4	Cash	56,160
	Preferred stock		54,000
	Paid in capital preferred stock		2,160
5	Retained earnings	74,210			=1810*41
	Common stock dividend distributable		74,210
6	Common stock dividend distributable	74,210
	Common stock		9,050		=1810*5
	Paid in capital common stock		65,160		=1810*36
7	Retained earnings	63,220
	Dividend distributable on preferred stock		23,400		=(1800+540)*10
	Dividend distributable on common stock		39,820		=19910*2