Jupiter Co. reported the following information at January 1, 2016: Commen Steck,

Question

Jupiter Co. reported the following information at January 1, 2016: Commen Steck, $1 par, 100,000 shares authorined, 50,000 shares issued and outstanding During 2016, the following transactions occurred: June 10 Repurchased 1,000 shares of its eutstanding cemmon stock for $12 per share. July I Seld 500 shares of treasury steck for $14 per share Sept. 1 Seld 500 shares of treasery steck fer $9.50 per share. Required: Prepare the journal entries that Meyer needs to record for each of these 2016 transactions. 2 Madison Co. has issued 50,000 shares of commorn stock; 48,000 shares are outstanding and 2,000 shares are held as treasury stock. On August 15, 2016, Madison's board of directors declared a cash dividend of S1.50 per share, payable on September 15, 2016, to stockholders of record on August 3 2016. Required: Prepare any necessary journal entries for August 15, August 31, and September 15

Explanation / Answer

Journal Entries

Date Particulars Debit Credit Jan 1, 2016 Cash Dr. (50000*1) 50,000 To Common Stock 50,000 (Being common stock issued) June10,2016 Treasury Stock Dr. (1000*1) 1,000 Additional Paid-in Capital, Common Stock Dr. (1000*11) 11,000 To Cash 12,000 (Being Shares repurchased at 12 per shares) July1,2016 Cash Dr. (500*14) 7,000 To Treasury Stock (500*1) 500 To Additional Paid-In Capital 6,500 (Being shares sold at 12 per share) Sept1,2016 Cash Dr. (500*9.5) 4,750 To Treasury Stock (500*1) 500 To Additional Paid-In Capital 4,250 (Being shares sold at 9.50 per share)

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