Question

Sun Corporation received a charter that authorized the issuance of 96,000 shares of $3 par common stock and 22,000 shares of $75 par, 4 percent cumulative preferred stock. Sun Corporation completed the following transactions during its first two years of operation: Year 1 Jan. 5 Sold 14,400 shares of the $3 par common stock for $5 per share. 12 Sold 2,200 shares of the 4 percent preferred stock for $85 per share. Apr. 5 Sold 19,200 shares of the $3 par common stock for $7 per share. Dec. 31 During the year, earned $314,200 in cash revenue and paid $240,000 for cash operating expenses. 31 Declared the cash dividend on the outstanding shares of preferred stock for Year 1. The dividend will be paid on February 15 to stockholders of record on January 10, Year 2. 31 Closed the revenue, expense, and dividend accounts to the retained earnings account. Year 2 Feb. 15 Paid the cash dividend declared on December 31, Year 1. Mar. 3 Sold 3,300 shares of the $75 par preferred stock for $95 per share. May 5 Purchased 600 shares of the common stock as treasury stock at $6 per share. Dec. 31 During the year, earned $249,600 in cash revenues and paid $175,600 for cash operating expenses. 31 Declared the annual dividend on the preferred stock and a $0.75 per share dividend on the common stock. 31 Closed revenue, expense, and dividend accounts to the retained earnings account.

Required
a. Prepare journal entries for these transactions for Year 1 and Year 2 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. Round your intermediate calculations and final answer to the nearest dollar amount. Select "12/31 cl." for all the closing entries.)
  

• 1

  Sold 14,400 shares of the $3 par common stock for $5 per share.

• 2

  Sold 2,200 shares of the 4 percent preferred stock for $85 per share.

• 3

  Sold 19,200 shares of the $3 par common stock for $7 per share.

• 4

  Record cash revenue earned.

• 5

  Record payment for operating expenses.

• 6

  Declared the cash dividend on the outstanding shares of preferred stock for Year 1. The dividend will be paid on February 15 to stockholders of record on January 10, Year 2.

• 7

  Record the closing entry for service revenue.

• 8

  Record the closing entry for operating expenses.

• 9

  Record the closing entry for dividends.

• 10

  Paid the cash dividend declared on December 31, Year 1.

• 11

  Sold 3,300 shares of the $75 par preferred stock for $95 per share.

• 12

  Purchased 600 shares of the common stock as treasury stock at $6 per share.

• 13

  Record cash revenue earned.

• 14

  Record payment for operating expenses.

• 15

  Declared the annual dividend on the preferred stock and a $0.75 per share dividend on the common stock.

• 16

  Record the closing entry for revenue accounts.

• 17

  Record the closing entry for operating expenses.

• 18

  Record the closing entry for dividends.

6

Answer 1