Using the following information, prepare the journal entries necessary to record

Question

Using the following information, prepare the journal entries necessary to record King Cole Corp's stock transactions during 2015. On January 15, 2015 40,000 shares of $20 par common stock are sold to the general public for $30 per share. On August 10, 2015, 6,000 shares of common stock are issued for plant machinery and equipment. The market price of the stock on this day was $50 per share. On October 1, 2015, King Cole Corp declared a cash dividend of $12,000 to the common stockholders. On October 15, 2015 King Cole Corp issued 500 shares of common stock to acquire the patent for the design of improvements to GPS monitoring. The fair market value of the design was $20,000. The dividend declared on October 1, 2015 was paid to the common stockholders on November 1, 2015. November 30, 2015, King Cole announced a 10 percent stock dividend. The market price of the stock on that day was $55 per share. The dividend declared on November 30, 2015 was issued to the common stockholders on December 30, 2015. Prepare the necessary closing entries on December 31, 2015 for King Cole Corp.

Explanation / Answer

Journal Entries

Date Ledger Name Debit Credit 15.01.2015 Bank $1200000 Share Capital $800000 Share Premium $400000 10.08.2015 Plant,Machinery & Equipment $300000 Share Capital $120000 Share Premium $180000 01.10.2015 Reserves & Surplus $12000 Dividend Payable $12000 15.10.2015 Patent $20000 Share Capital $10000 Share Premium $10000 01.11.2015 Dividend Payable $12000 Bank $12000 30.11.2015 Reserves & Surplus $93000 Dividend Payable $93000 30.11.2015 Dividend Payable $93000 Share Capital $93000

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