Declared a cash dividend on the 5%,$100 par preferred stock(900 shares outstandi

Question

Declared a cash dividend on the 5%,$100 par preferred stock(900 shares outstanding). Declared a $0.30 per share dividend on the 80,000 shares of common stock outstanding. The date of record is January 31 and the payment due is February 15 Paid the cash dividends Split common stock 2 for 1. Before the split, Summer born had 80,000 shares of $50% stock dividend on the common stock. The market value of the common stock was $9 per share. Purchased 1,000 shares of treasury stock at $q3 per share Sold 500 shares of treasury stock for $15 per share Sold 300 shares of treasury stock for $8 per share. Record the transactions in summer born/s general journal Journalizing dividend and Treasury stock transactions, and preparing

Explanation / Answer

Jan 16 Declared a cash dividend on the 5%, $100 par preferred stock (900 shares outstanding). Declared a $0.30 per share dividend on the 80,000 shares of common stock outstanding.
Dr Dividend - preferred stock 4,500
Dr Dividend - common stock 24,000
Cr Dividend payable 28,500

Feb 15 Paid the cash dividends
Dr Dividend payable 28,500
Cr Cash 28,500

Jun 10 Split common stock 2 for 1. Before the split, Summerborn had 80,000 shares of $6 par common stock outstanding.
No journal entry is needed to account for a stock split, but now Summerborn has 160,000 shares of $3 par common stock outstanding.

Jul 30 Distributed a 50% stock dividend on the common stock. The market value of the common stock was $9 per share.
Dr Retained earnings 240,000 (160,000 shares x 50% x $3)
Cr Common stock 240,000
This is a large stock dividend, so it's accounted for at par value. After this stock dividend there are 240,000 common shares outstanding.

Oct 26 Purchased 1,000 shares of treasury stock at $13 per share
Dr Treasury stock 13,000
Cr Cash 13,000
There are now 239,000 common shares issued and outstanding

Nov 8 Sold 500 shares of treasury stock for $15 per share.
Dr Cash 7,500
Cr Treasury stock 6,500
Cr Paid-in capital in excess of par 6,500
There are now 239,500 common shares issued and outstanding

Nov 30 Sold 300 shares of treasury stock for $8 per share.
Dr Cash 2,400
Dr Paid-in capital in excess of par 1,500
Cr Treasury stock 3,900

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