Question

Entries for Selected Corporate Transactions

Selected transactions completed by ATV Discount Corporation during the current fiscal year are as follows:

Instructions:

Journalize the transactions. If no entry is required, select "No Entry Required" from the dropdown box and leave the amount boxes blank. For a compound transaction, if an amount box does not require an entry, leave it blank.

Jan. 5. Split the common stock 4 for 1 and reduced the par from $100 to $25 per share. After the split, there were 400,000 common shares outstanding.

Date	Account	Debit	Credit
Jan. 5.	No Entry Required
	No Entry Required

Mar. 10. Purchased 32,000 shares of the corporation's own common stock at $28, recording the stock at cost.

Date	Account	Debit	Credit
Mar. 10.

Apr. 30. Declared semiannual dividends of $3.7 on 60,000 shares of preferred stock and $0.34 on the common stock to stockholders of record on May 15, payable on June 15.

Date	Account	Debit	Credit
Apr. 30.

June 15. Paid the cash dividends.

Date	Account	Debit	Credit
June 15.

Aug. 20. Sold 23,000 shares of treasury stock at $36, receiving cash.

Date	Account	Debit	Credit
Aug 20.

Oct. 15. Declared semiannual dividends of $3.7 on the preferred stock and $0.4 on the common stock (before the stock dividend).

Date	Account	Debit	Credit
Oct. 15.

Oct. 15. A 2% common stock dividend was declared on the common stock outstanding. The fair market value of the common stock is estimated at $38.

Date	Account	Debit	Credit
Oct. 15.

Dec. 19. Paid the cash dividends.

Date	Account	Debit	Credit
Dec. 19.

Dec. 19. Issued the certificates for the common stock dividend.

Date	Account	Debit	Credit
Dec. 31.

Answer 1

Journal entries :- Date Accounts Title & Explanation Debit $ Credit $ 05-Jan No entry is required No entry is required Note: -(Stockholders ledger would be revised to record new par value and the increased number of shares of each shareholder) 896,000 10-Mar Treasury stock (32000*28) To Cash (Entry for purchase of own common stock) 896,000 30-Apr Cash dividends 60000*3.70)+((400000-32000)*0.34)) 347,120 To Cash dividend payable (Entry for Dividend payable to preferrence and common stockholders) 347,120 347,120 15-Jun Cash dividend payable To Cash (Entry for payment of cash dividend) 347,120 20-Aug Cash (23000*36) 828,000 To Treasury stock (23000*28) To Additional paid in capital - Treasury stock (23000*(36-28)) (Entry for issue of treasury stock above its purchase value) 644,000 184,000 15-Oct Cash dividends (60000*3.70)+((400000-9000)*0.4) 378,400 To Cash dividend payable (Entry for Dividend payable to preferrence and common stockholders) 378,400 297,160 15-Oct Stock dividends (400000-9000)*2%*38) To Stock dividend distributable (7820*25) To Paid in capital in excess of Par (7820"(38-25)) (Entry for stock dividend) 195,500 101,660 378,400 19-Dec Cash dividend payable To Cash (Entry for payment of cash dividend) 378,400 19-Dec Stock dividend distributable 195,500 To Common stock (Entry for issue of share certificates for the common stock dividend) 195,500