Selected transactions completed by Equinox Products Inc. during the fiscal year

Question

Selected transactions completed by Equinox Products Inc. during the fiscal year ended December 31, 20Y8, were as follows:

Record on journal page 10:

Record on journal page 11:

Journalize the selected transactions. Refer to the Chart of Accounts for exact wording of account titles. Note: on May 16 record the declaration of dividends for common shares and the declaration of dividends for preferred shares as two separate entries.

Selected transactions completed by Equinox Products Inc. during the fiscal year ended December 31, 20Y8, were as follows:

Record on journal page 10:

Record on journal page 11:

X

Chart of Accounts

1. Journalize the selected transactions. Refer to the Chart of Accounts for exact wording of account titles. Scroll down for journal page 11. Note: on May 16 record the declaration of dividends for common shares and the declaration of dividends for preferred shares as two separate entries.

Interest Expense

Jan. 3 Issued 15,000 shares of $20 par common stock at $30, receiving cash. Feb. 15 Issued 4,000 shares of $80 par preferred 5% stock at $100, receiving cash. May 1 Issued $500,000 of 10-year, 5% bonds at 104, with interest payable semiannually. 16 Declared a quarterly 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. 26 Paid the cash dividends declared on May 16. Jun. 8 Purchased 8,000 shares of treasury common stock at $33 per share. 30 Declared a $1.00 quarterly cash dividend per share on preferred stock. On the date of record, 20,000 shares of preferred stock had been issued. Jul. 11 Paid the cash dividends to the preferred stockholders.

Explanation / Answer

General Journal Page 10 Date Description Post. Ref. Debit Credit Jan. 3 Cash (15000 x $30) 450000 Common stock (15000 x $20) 300000 Paid-in capital in excess of par-common stock 150000 (To record issuance of common stock) Feb. 15 Cash (4000 x $100) 400000 Preferred stock (4000 x $80) 320000 Paid-in capital in excess of par-preferred stock 80000 (To record issuance of preferred stock) May. 1 Cash ($500000 x 104/100) 520000 Premium on bonds payable 20000 Bonds payable 500000 (To record issuance of bonds payable) May. 16 Cash dividends ($0.50 x 100000) 50000 Cash dividends payable 50000 (To record cash dividends declared on common shares) May. 16 Cash dividends ($1.00 x 20000) 20000 Cash dividends payable 20000 (To record cash dividends declared on preferred shares) May. 26 Cash dividends payable 70000 Cash 70000 (To record payment of cash dividends declared) Jun. 8 Treasury stock (8000 x $33) 264000 Cash 264000 (To record purchase of treasury stock) Jun. 30 Cash dividends ($1.00 x 20000) 20000 Cash dividends payable 20000 (To record cash dividends declared on preferred stock) Jul. 11 Cash dividends payable 20000 Cash 20000 (To record payment of cash dividends declared) General Journal Page 11 Date Description Post. Ref. Debit Credit Oct. 7 Cash (2600 x $38) 98800 Treasury stock (2600 x $33) 85800 Paid-in capital from sale of treasury stock 13000 (To record sale of treasury stock) Oct. 31 Interest expense 11500 Premium on bonds payable ($20000/20) 1000 Cash ($500000 x 5% x 6/12) 12500 (To record semiannual interest payment and amortization of premium)

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