Zinnia Company: Zinnia Company incorporated on January 1, 2017. The company had
ID: 2530463 • Letter: Z
Question
Zinnia Company:
Zinnia Company incorporated on January 1, 2017. The company had authorized 1,500,000 shares of common stock, with a par value of $5 per share. The company had the following transactions during 2017:
Jan. 15 Issued 50,000 shares of common stock for $8 per share.
Sept. 1 Repurchased 5,000 shares of their common stock for $7 per share.
Nov. 1 Declared a $.50 per share cash dividend to be paid on Dec. 30 to stockholders of record on Dec. 1.
Required:
1. Prepare the necessary journal entries to record the above transactions. (12 points)
Date
Account Titles
Debit
Credit
2. Assume that Zinnia Company declared a 15% stock dividend on Nov. 1 instead of a cash dividend. If the stock was trading at $10 per share on Nov. 1, what journal entry would the company record on Nov. 1? (3 points)
Date
Account Titles
Debit
Credit
Date
Account Titles
Debit
Credit
Explanation / Answer
Journal entry :
2) Journal entry :
Date accounts & explanation debit credit Jan 15 Cash (50000*8) 400000 Common Stock (50000*5) 250000 Paid in capital in excess of par value-Common Stock 150000 (To record issue Common Stock) Sep 1 Treasury Stock 35000 Cash 35000 (To record stock repurchased) Nov 1 Cash dividend (45000*.50) 22500 Dividend payable 22500 (To record dividend declared)Related Questions
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