The transactions below took place during the year 2017. Show by journal entries

Question

The transactions below took place during the year 2017.

Show by journal entries the adjustments that would be made on a worksheet for a statement of cash flows. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)

1. Convertible bonds payable with a par value of $300,000 were exchanged for unissued common stock with a par value of $300,000. The market price of both types of securities was par. 2. The net income for the year was $410,000. 3. Depreciation expense for the building was $90,000. 4. Some old office equipment was traded in on the purchase of some dissimilar office equipment, and the following entry was made.

Explanation / Answer

Cashflow Event Account Title Debit Credit Amount Nature 1 Convertible bonds 300000 -300000 Financing Common Stock 300000 300000 Financing 2 Income Summary 410000 410000 Operating Retained Earnings 410000 3 Depreciatio Expense 90000 90000 Operating Acumulated Depreciation 90000 4 Equipment 50000 Accumulated Depreciation 30000 Equipment 40000 Cash 34000 34000 Investing Gain on disposal of plant assets 6000 -6000 Operating 5 Dividends 123000 -123000 Financing Dividends Payable 123000 123000 Operating

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