During its first year of operations, Cupola Fan Corporation issued 30,000 of $1

Question

During its first year of operations, Cupola Fan Corporation issued 30,000 of $1 par Class B shares for $385,000 on June 30, 2016. Share issue costs were $1,500. One year from the issue date (July 1, 2017), the corporation retired 10% of the shares for $39,500. Required: 1. to 4. Prepare the journal entry to record the issuance of the shares, the declaration of a $2 per share dividend on December 1, 2016, the payment of the dividend on December 31, 2016 and the retirement of the shares. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Explanation / Answer

Journal entries

*(383500/30000)×3000=38350-3000=35350

No. Date account titles debit credit 1 June30,2016 cash 383500 Common stock 30000 Paid in capital excess of par 353500 2 Dec1,2016 Retained earnings 60000 Dividend payable 60000 3. Dec31,2016 Dividend payable 60000 Cash 60000 4 July1,2017 Common stock 3000 Paid in capital excess of par 35350* Retained earnings 1150 Cash 39500

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