Question

Selected transactions completed by Canyon Ferry Boating Corporation during the current fiscal year are as follows:

Jan.	8	Split the common stock 2 for 1 and reduced the par from $80 to $40 per share. After the split, there were 157,000 common shares outstanding.
Apr.	30	Declared semiannual dividends of $0.65 on 19,000 shares of preferred stock and $0.24 on the common stock payable on July 1.
Jul.	1	Paid the cash dividends.
Oct.	31	Declared semiannual dividends of $0.65 on the preferred stock and $0.11 on the common stock (before the stock dividend). In addition, a 3% common stock dividend was declared on the common stock outstanding. The fair market value of the common stock is estimated at $52.
Dec.	31	Paid the cash dividends and issued the certificates for the common stock dividend.

Journalize the transactions. If no entry is required, simply skip to the next transaction. Refer to the Chart of Accounts for exact wording of account titles.

Answer 1

Ans: Journal entries are as follows (Amount in dollars) :

On 8th January :

Common stock par (80) Dr. 6280000

To common stock par (40) 6280000

On 30th April:

Retained Earnings Dr. 50030

To Preferred Dividend payable 12350

To Common Dividends Payable 37680

On 1st July :

Preferred Dividend payable Dr. 12350

Common Dividend payable Dr. 37680

To Cash 50030

On 31st Oct. :

Retained Earnings Dr. 218020

To Preferred Dividend payable 12350

To common dividends payable 205670

On 31st December:

Preferred Dividend payable 12350

Common Dividend payable 205670

To Cash 218020