Journal Entires Problem! Saturn Marine obtained a charter from the state in Janu
ID: 2468187 • Letter: J
Question
Journal Entires Problem! Saturn Marine obtained a charter from the state in January that authorized 1,000,000 shares of common stock, $5 par value. During the first year, the company earned $410,000 of net income and the following selected transactions occurred in the order given:
1) Write the following journal entries!
A) Record the issuance of 110,000 shares of common stock with a $5 par value for a price of $56 per share.
B) Record the purchase of 26,000 shares of previously issued common stock for a price of $51 per share.
C) Record the re-issuance of 10,500 shares of treasury stock previously purchased for a price of $51 per share and sold for $52 per share.
D) Record the re-issuance of 10,500 shares of treasury stock previously purchased for $51 per share and sold for $50 per share.
Journal Entires Problem! Saturn Marine obtained a charter from the state in January that authorized 1,000,000 shares of common stock, $5 par value. During the first year, the company earned $410,000 of net income and the following selected transactions occurred in the order given:
Explanation / Answer
Journal entries Point Date Accounting Particulars Debit Credit A Cash - Dr 6216000 To Common Stock 555000 To Additional paid in Capital 5661000 (Being issuance of 110,000 shares of common stock with a $5 par value for a price of $56 per share.) B Common Stock 130000 Additional Paid in Capital 1196000 To Cash 1326000 (Being purchase of 26,000 shares of previously issued common stock for a price of $51 per share.) C Cash-Dr 546000 To Treasury Stock 535500 To Additional paid in Capital 10500 (Being re-issuance of 10,500 shares of treasury stock previously purchased for a price of $51 per share and sold for $52 per share.) D Cash-Dr 525000 Additional paid in Capital 10500 To Treasury Stock 535500 (Being re-issuance of 10,500 shares of treasury stock previously purchased for $51 per share and sold for $50 per share)
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