The annual report for Malibu Beachwear reported the following transactions affec

Question

The annual report for Malibu Beachwear reported the following transactions affecting stockholders’ equity:

Paid the dividends in (b).

2.

Prepare journal entries to record each of these events. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

a.Record the purchase of $350,200 common stock.

b. Record the cash dividends declared in the amount of $260,100.

c. Record the payment of the dividend.

d. Record the issue of 102,000 shares of $0.10 par value common shares for $2 per share.

e. Closed the Dividends account. Record the entry.

a. Purchased $350,200 of common stock now held in treasury. b. Declared cash dividends in the amount of $260,100. c.

Paid the dividends in (b).

d. Issued 102,000 new shares of $0.10 par value common shares for $2 per share. e. Closed the Dividends account.

Explanation / Answer

A. Treasury stock debit $350200

Cash credit $350200

B. Dividend declared debit $260100

Dividend payable credit $ 260100

C. Dividend payable debit $260100

Cash credit. $260100

D. Cash debit 102000 ×2 = $ 204000

Common stock credit 102000 × .10 =$ 10200

Excess value over par value credit. $91800

E. P&l debit $260100

Dividend declared credit $260100

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