WileyPLUS l Help Contact Us1 Los Out LUS (310/311/312) INTERMEDIATE ACCOUNTING 1

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WileyPLUS l Help Contact Us1 Los Out LUS (310/311/312) INTERMEDIATE ACCOUNTING 1& Kleso, Intermediate Accounting, 160 dy &Practice; n Assignment Exercise 15-18 (Part Level Submission) Bonita Company reported the following amounts in the stockholders' equlity section of Its December 31, 2016, balance sheet. Preferred stock, 10%, $100 par (10,000 shares authorized, 2,200 shares issued) $220,000 Common stock, $5 par (95,500 shares authortzed, 19,100 shares issued) Additional paid-in capital Retalned earnings 500 shares authortzed, 19,100 shares 95,500 136,000 455,000 $906,500 During 2017, Bonita took part in the following transactions concerning stockholders' equity. 1. Pald the annual 2016 $10 per share dividend on preferred stock and a $2 per share dividend on common stock. These dividends had been declared on December 31, 2016 2. Purchased 1,700 shares of its own outstanding common stock for $42 per share. Bonita uses the cost 3. Reissued 800 treasury shares for land valued at $34,600 4. Issued 460 shares of preferred stock at $105 per share. 5. Declared a 10% stock dividend on the outstanding common stock when the stock is selling for $45 per share. 6. Issued the method. stock dividend per share dividend on common stock. These dividends are payable in 2018. 7. Declared the annual 2017 $10 per share dividend on preferred stock and the $2 Prepare journal entries to record the transactions described above. (Credit account titles are a manually. If no entry is required, select "No Entry" for the account titles and enter o automatically indented when amount Is entered. Do not Indent for the amounts.) 888 r 6 8 3 WE command option

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Solution:

Journal Entries - Bonita Company Event Particulars Debit Credit 1 Dividend Payable Dr (2200*$10 + 19100*$2) $60,200.00            To Cash $60,200.00 (To record payment of dividend) 2 Treasury stock Dr $71,400.00            To Cash $71,400.00 (To record purchase of own stock) 3 Land Dr $34,600.00            To Treasury Stock $33,600.00            To Additional paid in capital $1,000.00 (To record purchase of land by re issue of treasury stock) 4 Cash Dr $48,300.00            To Preferred Stock $46,000.00            To Additional paid in capital $2,300.00 (To record issue of preferred shares) 5 Stock Dividend Dr (1820*$45) $81,900.00            To Stock dividend distributable $81,900.00 (To record declaration of stock dividend) 6 Stock dividend distributable Dr $81,900.00        To Common Stock $9,100.00            To Additional paid in capital $72,800.00 (To record issue of stock dividend) 7 Cash Dividend Dr (2660*$10 + 20020*$2) $66,640.00            To Dividend payable $66,640.00 (To record declaration of dividend)

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