On January 1, 2012, Cher Corporation had 60,000 shares of $1 par value common st
ID: 2447524 • Letter: O
Question
On January 1, 2012, Cher Corporation had 60,000 shares of $1 par value common stock issued and outstanding. During the year, the following transactions occurred:
Mar 1 Issued 25,000 shares of common stock for $550,000.
June 1 declared a cash dividend of $2.00 per share to stockholders of record on June 15.
June 30 paid the $2.00 cash dividend.
Dec. 1 Purchased 5,000 shares of common stock for the treasury for $22 per share.
Dec. 15 declared a cash dividend on outstanding shares of $2.25 per share to stockholders of record on December 31.
Dec 31 Issued 1,000 treasury stock purchased above for $24 per share.
Prepare journal entries to record the above transactions
Explanation / Answer
Answer
Mar 1 Issued 25,000 shares of common stock for $550,000.
Dr Cash $550,000
Cr Common stock $25,000
Cr Additional Paid-in Capital $525,000
June 1 declared a cash dividend of $2.00 per share to stockholders of record on June 15.
Dr Cash Dividends $ 170,000
Cr Dividends Payable $ 170,000
June 30 paid the $2.00 cash dividend.
Dr Dividends Payable $170,000
Cr Cash $170,000
Dec. 1 Purchased 5,000 shares of common stock for the treasury for $22 per share.
Dr Treasury $110,000
Cr Common Stock $110,000
Dec. 15 declared a cash dividend on outstanding shares of $2.25 per share to stockholders of record on December 31.
Dr. Retained Earnings $180,000
Cr. Dividend Payable $180,000
Dec 31 Issued 1,000 treasury stock purchased above for $24 per share.
Dr Cash $24,000
Cr Treasury Stock $24,000
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