Issues 15,000 shares of $20 per common stock at $30, receiving cash. Issued 4,00

Question

Issues 15,000 shares of $20 per common stock at $30, receiving cash. Issued 4,000 shares of $80 per preffered 5% stock at $100, receiving cash. Issued $500,000 of 10-year, 5% bonds at 104, with interest payable semiannually. Declared a dividend of $0.50 per share on common stock and $ 1.00 per share on preferred stock. On the date of record. 100,000 shares of common stock were outstanding, no treasury shares were held, and 20,000 shares of preferred stock were outstanding. Journalize this transaction as a single entry. Paid the cash dividends declared on May 16. Purchased 7,500 shares of Solstice Corp. at $40 per share, plus a $ 150 brokerage commission. The investment is classified as an available-for-sale investment. Purchased 8,000 shares of treasury common stock at $33 per share. 22 Purchased 40.000 shares of Pinkberry Co. stock directly from the founders for $24 per share. Pinkberry has 125,000 shares issued and outstanding. Equinox Products Inc. treated the investment as an equity method investment. 30 Declared a $1.00 cash dividend per share on preferred stock. On the date of record. 20,000 shares of preferred stock were outstanding. Paid the cash dividends declared on Jul. 11 to the preferred stockholders. Received $27,500 dividend from Pinkberry Co. investment of Jun. 22.

Explanation / Answer

Ans: Journal Entry:- Date Particular Dr. Cr. 03.01. Cash A/c Dr. 450000                to common Stock 300000               to Premium on common stock 150000 15.02 Cash A/c Dr. 400000                 to Prefered stock 320000                 to paid in Capital in excess at par 80000 1.05 Cash a/c Dr. 520000              to Bond Payable 500000              to premium on bond payable 20000 16.05 Dividend Declared on common stock A/c Dr. 50000 Dividend declaired on pref stock A/c dr. 200000                      to Dividend Payable 250000 26.05 Dividend Payable A/c Dr. 250000                   to Cash 250000 8.06 Tresury Stock A/c Dr. 264000                to Cash 264000

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