Get Your Motor Runnin\' had the following stock transactions during the year: 1-

Question

Get Your Motor Runnin' had the following stock transactions during the year:

1-Jun                      Issued 5,000 shares of $5 par common stock for $30,000 and 2,000 shares

                               of $10 par 5% cumulative preferred stock for $35,000.

5-Sep                     Purchased 1,000 shares of its own common stock for $6,000.

1-Nov                     Sold 500 shares of Treasury Stock for $3,500.

31-Dec                   Paid dividends of $10,000.

Instructions:

Use the journal provided below to record the transactions.

Journal

Date

Account Title

Debit

Credit

Journal

Date

Account Title

Debit

Credit

Explanation / Answer

Journal Entries Jun-01 Cash Dr 65000 To Preferred Stock 25000 To 5% Cumulative Stock 20000 To Securities Premium 20000 Sep-05 Loss on Purchase 1000 Common Stock Dr 5000 To cash 6000 Nov-01 Cash dr 3500 To Treasury Stock 3500 Dec-31 Dividends 10000 To Cash 10000

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