Name(s) Class Time In-Class Case # 10 Chapter 10 Steele Corporation\'s charter h

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Name(s) Class Time In-Class Case # 10 Chapter 10 Steele Corporation's charter has authorized the following capital stock: Common stock, par value $2 per share, 80,000 shares; Preferred stock, 10% $20 par value per share, 15,000 shares. During the first year of Steele's operations, the following transactions were completed: Jan 1 Jan 1 July 1 Sept 1 Sold and issued 50,000 shares of common stock for cash at $50 per share. Sold and issued 10,000 shares of preferred stock for S100 per share. Bought back 2,000 shares from a common stockholder for cash at $52 per share. Declared a $1.50 dividend to shareholders of record at Sept. 15 to be paid at Dec. 31. Paid the dividend declared on Sept. 1. Dec 31 Required Journalize the above transactions.

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Date Account titles and explanation Debit Credit Jan 1 Cash (50,000 * 50) 2,500,000 Common stock (50,000 * 2) 100,000 Paid-In Capital in Excess of Par - Common Stock 2,400,000 (issued 50,000 shares of common stock) Jan 1 Cash (10,000 * 100) 1,000,000 Preferred stock (10,000 * 20) 200,000 Paid-In Capital in Excess of Par - Preferred Stock 800,000 (issued 10,000 shares of Preferred stock) July 1 Treasury stock (2,000 * 52) 104,000 Cash 104,000 (Brought back 2,000 shares) Sept 1 Retained earnings 242,000 Dividend payable 242,000 (128,000 + 1.5) + (25,000 * 20) * 10% Dec 31 Dividend payable 242,000 Cash 242,000

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