During 2004, Road Runner Corporation engaged in the following selected transacti

Question

During 2004, Road Runner Corporation engaged in the following selected transactions: Jan. 1 Issued 15,000 shares of $ 1 par value common stock at $18 per share. June 15 Reacquired 1,000 shares of common stock sold on Jan. 1 for $19 per share. Aug. 10 Sold 600 shares of its treasury stock purchased on June l S for $20 per share. Sept. 30 The board of directors declares and distributes a 10% common stock dividend. The current selling price of die common stock is $21 per share. Nov. 30 The board of directors declares a cash dividend of $.55 per share payable to stockholders on December 15. Dec. 15 Paid the cash dividends declared on November 30. Record journal entries for the above transactions.

Explanation / Answer

Road Runner Corporation All Amounts in $ Journal Entries Date Particulars Debit Credit 01/01/2004 Cash A/c 270000 To Common Stock A/c 15000 To Additional Paid-in Capital A/c 255000 15/06/2004 Treasury Stock A/c 19000 To Cash A/c 19000 10/08/2004 Cash A/c 12000 To Treasury Stock A/c 11400 To Additional Paid-in Capital A/c 600 30/09/2004 Common Stock Dividend A/c 31500 To Common Stock A/c 1500 To Additional Paid-in Capital A/c 30000 30/11/2004 Cash Dividend A/c 9075 15,000 shares + 1,500 stock dividend shares = 16,500 shares To Dividends Payable A/c 9075 15/12/2004 Dividends Payable A/c 9075 To Cash A/c 9075

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