Nautical has two classes of stock authorized: $10 par preferred, and $1 par valu
ID: 2469854 • Letter: N
Question
Nautical has two classes of stock authorized: $10 par preferred, and $1 par value common. As of the beginning of 2015, 100 shares of preferred stock and 1,800 shares of common stock have been issued. The following transactions affect stockholders’ equity during 2015:
March 1
April 1
June 1 Declare a cash dividend on both common and preferred stock of $0.60 per share to all stockholders of record on June 15.
June 30
August 1 Repurchase 200 shares of common treasury stock for $14 per share.
September 1 Reissue 100 shares of treasury stock purchased on August 1 for $16 per share.
Nautical has the following beginning balances in its stockholders’ equity accounts on January 1, 2015: Preferred Stock, $1,000; Common Stock, $1,800; Paid-in Capital, $18,300; and Retained Earnings, $10,300. Net income for the year ended December 31, 2015, is $7,050.
Record each of these transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Nautical has two classes of stock authorized: $10 par preferred, and $1 par value common. As of the beginning of 2015, 100 shares of preferred stock and 1,800 shares of common stock have been issued. The following transactions affect stockholders’ equity during 2015:
March 1
Issue 1,800 additional shares of common stock for $17 per share.April 1
Issue 200 additional shares of preferred stock for $28 per share.June 1 Declare a cash dividend on both common and preferred stock of $0.60 per share to all stockholders of record on June 15.
June 30
Pay the cash dividends declared on June 1.August 1 Repurchase 200 shares of common treasury stock for $14 per share.
September 1 Reissue 100 shares of treasury stock purchased on August 1 for $16 per share.
Nautical has the following beginning balances in its stockholders’ equity accounts on January 1, 2015: Preferred Stock, $1,000; Common Stock, $1,800; Paid-in Capital, $18,300; and Retained Earnings, $10,300. Net income for the year ended December 31, 2015, is $7,050.
Record each of these transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Explanation / Answer
Date Account Title & Explanation Debit($) Credit($) Mar-01 Cash 30600 Common Stock 1800 Paid in capital in excess of par - common stock 28800 (Issue 1,800 additional shares of common stock for $17 per share.) Apr-01 Cash 5600 Preferred stock 2000 paid in capital in excess of par - preferred stock 3600 (Issue 200 additional shares of preferred stock for $28 per share) Jun-01 Retained earnings 2340 Cash dividend payable-preferred stock 180 Cash dividend payable-common stock 2160 (dividend declared) Jun-30 Cash dividend payable-preferred stock 180 Cash dividend payable-common stock 2160 Cash 2340 (dividend paid) Aug-01 Treasury Stock - at cost 2800 Cash 2800 (Repurchase 200 shares of common treasury stock for $14 per share.) Sep-01 Cash 1600 Treasury Stock - at cost 1400 Additional paid in capital-treasury stock 200 (Reissue 100 shares of treasury stock purchased on August 1 for $16 per share)
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