On January 1, Chreesh Corporation had 91,500 shares of no-par common stock issue

Question

On January 1, Chreesh Corporation had 91,500 shares of no-par common stock issued and outstanding. The stock has a stated value of $5 per share. During the year, the following occurred. Apr. 1 Issued 28,600 additional shares of common stock for $18 per share. June 15 Declared a cash dividend of $2 per share to stockholders of record on June 30. July 10 Paid the $2 cash dividend. Dec. 1 Issued 2,400 additional shares of common stock for $18 per share. 15 Declared a cash dividend on outstanding shares of $1.20 per share to stockholders of record on December 31. Prepare the entries, if any, on each of the three dividend dates. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit June 15 July 10 Dec. 15

Explanation / Answer

Apr. 1
Cash Dr. 514800 (28600*18)
Common stock Cr. 143000 (28600*5)
Paid in capital -- in excess of par Cr. 371800 (514800-143000)

June 15
Cash dividends Dr. 240200 (2*[91500+28600])
Cash dividends payable Cr. 240200
Explanation: Date of declaration - $2 per share outstanding

July 10
Cash dividends payable Dr. 240200
Cash Cr. 240200
Explanation: Date of payment

Dec. 1
Cash Dr. 43200 (2400*18)
Common stock Cr. 12000 (2400*5)
Paid in captial -- in excess of par Cr. 31200 (43200-12000)

Dec. 15
Cash dividends Dr. 147000 ([91500+28600+2400]*1.20)
Cash dividends payable Cr. 147000
Explanation: Date of declaration - $1.20 per share

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