Survivor Company was formed on January 1, 2006 by selling and issuing 20,000 sha

Question

Survivor Company was formed on January 1, 2006 by selling and issuing 20,000 shares of common stock at $15 per share. On December 1, 2007, the company declared a cash dividend of $10,000 which will be paid in cash on January 15, 2008. The annual accounting period ends December 31.

A. Give the journal entry to record the sale and issuance of common stock on January 1, 2006, for each of the following independent assumptions:
1. The common stock has $10 par value per share
Date Account name Debit Credit




2. The common stock has a stated value of $5 per share with no par value.
Date Account name Debit Credit




3. The common stock has no par and no stated value

Date Account name Debit Credit




B Give the journal entry to record the dividend declaration on 12/01/2007
Date Account name Debit Credit




c. Give the journal entry to record the payment of the dividend on 01/15/2008
Date Account name Debit Credit

Explanation / Answer

A. 1. January 1, 2006 cash Debit 3,000,000 Common Stock, $10 par value Credit 2,000,000 paid in capital in excess of par value, common stock Credit 1,000,000 2. Janury 1, 2006 cash Debit 3,000,000 Common stock, $5 par value Credit 1,000,000 paid in capital in excess of par value, common stock Credit 2,000,000 3. January 1, 2006 Cash Debit 3,000,000 Common Stock, no-par value Credit 3,000,000 B. 12/1/2007 REtained earnings Debit 10,000 Common Dividends payable Credit 10,000 C. January 15, 2008 Common Dividend Payable Debit 10,000 Cash Credit 10,000

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