Survivor Company was formed on January 1, 2008 by selling and issuing 20,000 sha
ID: 2356601 • Letter: S
Question
Survivor Company was formed on January 1, 2008 by selling and issuing 20,000 shares of common stock at $15 per share. On December 1, 2009, the company declared a cash dividend of $10,000 which will be paid in cash on January 15, 2010. The annual accounting period ends December 31. A. Give the journal entry to record the sale and issuance of the common stock on January 1, 2008, for each of the following independent assumptions: The common stock has a par value of $10 per share. The common stock was no par with a stated value of $5 per share. The common stock was no par and no stated value. B. Give the journal entry to record the dividend declaration on December 1, 2009. C. Show the journal entry to record payment of the dividend on January 15, 2010.Explanation / Answer
A.
1.
January 1, 2008
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, 2008
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, 2008
Cash Debit 3,000,000
Common Stock, no-par value Credit 3,000,000
B.
12/1/2009
REtained earnings Debit 10,000
Common Dividends payable Credit 10,000
C.
January 15, 2010
Common Dividend Payable Debit 10,000
Cash Credit 10,000
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