The following is a summary of all relevant transactions of Jackson Day Corporati
ID: 2359672 • Letter: T
Question
The following is a summary of all relevant transactions of Jackson Day Corporation since it was organized in 2007.In 2007, 15,000 shares were authorized and 7,000 shares of common stock ($50 par value) were issued at a price of $57. In 2008, 1,000 shares were issued as a stock dividend when the stock was selling for $62. Three hundred shares of common stock were bought in 2009 at a cost of $66 per share. These 300 shares are still in the company treasury.
In 2008, 10,000 preferred shares were authorized and the company issued 4,000 of them ($100 par value) at $113. Some of the preferred stock was reacquired by the company and later reissued for $4,700 more than it cost the company.
The corporation has earned a total of $610,000 in net income after income taxes and paid out a total of $312,600 in cash dividends since incorporation.
Provide the journal entries to record these transactions.
Explanation / Answer
In 2007, 15,000 shares were authorized and 7,000 shares of common stock ($50 par value) were issued at a price of $57. Debit: Cash 399,000 Credit: Common Stock 350,000 Credit: Paid-in Capital in excess of par value, common stock 49,000 In 2008, 1,000 shares were issued as a stock dividend when the stock was selling for $62. Debit: Retained Earnings 62,000 Credit: Common Stock 50,000 Credit: Paid-in Capital in excess of par value, common stock 12,000 Three hundred shares of common stock were bought in 2009 at a cost of $66 per share. These 300 shares are still in the company treasury. Debit: Treasury Stock, Common 19,800 Credit: Cash 19,800 In 2008, 10,000 preferred shares were authorized and the company issued 4,000 of them ($100 par value) at $113. Debit: Cash 452,000 Credit: Preferred Stock 400,000 Credit: Paid-in Capital in excess of par value, preferred stock 52,000 Some of the preferred stock was reacquired by the company and later reissued for $4,700 more than it cost the company. Debit: Cash 4,700 Credit: Paid-in capital, Treasury Stock 4,700 The corporation has earned a total of $610,000 in net income after income taxes Debit: Income Summary 610,000 Credit: Retained Earnings 610,000 and paid out a total of $312,600 in cash dividends since incorporation. Debit: Retained Earnings 312,600 Credit: 312,600
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