Selected transactions completed by Primo Discount Corporation during the current
ID: 2537090 • Letter: S
Question
Selected transactions completed by Primo Discount Corporation during the current fiscal year are as follows:
Journalize the transactions. If no entry is required, simply skip to the next transaction. Refer to the Chart of Accounts for exact wording of account titles.
Chart of Accounts
Journal
Journalize the transactions. If no entry is required, simply skip to the next transaction. Refer to the Chart of Accounts for exact wording of account titles.
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Jan. 9 Split the common stock 3 for 1 and reduced the par from $75 to $25 per share. After the split, there were 1,150,500 common shares outstanding. Feb. 28 Purchased 41,400 shares of the corporation’s own common stock at $28, recording the stock at cost. May 1 Declared semiannual dividends of $0.80 on 74,100 shares of preferred stock and $0.12 on the common stock to stockholders of record on June 1, payable on July 10. Jul. 10 Paid the cash dividends. Sep. 7 Sold 29,000 shares of treasury stock at $33, receiving cash. Oct. 1 Declared semiannual dividends of $0.80 on the preferred stock and $0.12 on the common stock (before the stock dividend). In addition, a 2% common stock dividend was declared on the common stock outstanding. The fair market value of the common stock is estimated at $36. Dec. 1 Paid the cash dividends and issued the certificates for the common stock dividend.Explanation / Answer
Date
Description
Debit
Credit
Jan-09
No journal entry is necessary
Feb-28
Treasury stock (41,400 x $28)
$ 1,159,200.00
Cash
$ 1,159,200.00
May-01
Cash dividends
$ 192,372.00
Cash dividend payable
$ 192,372.00
(74,100 x $0.80) + (1,109,100 x $0.12)
Jul-10
Cash dividend payable
$ 192,372.00
Cash
$ 192,372.00
Sep-07
Cash (29,000 x $33)
$ 957,000.00
Treasury stock (29,000*$28)
$ 812,000.00
Paid in capital from sale of Treasury stock
$ 145,000.00
Oct-01
Cash dividends
$ 195,852.00
Cash dividend payable
$ 195,852.00
(74,100 x 1.20) + (1,138,100 x 0.12)
Stock dividends (1,138,100 x 2% x $36)
$ 819,432.00
Stock dividends distributable (1,138,100 x 2% x $25)
$ 569,050.00
Paid in capital in excess of par – Common stock
$ 250,382.00
Dec-01
Cash dividend payable
$ 195,852.00
Cash
$ 195,852.00
Stock dividends distributable
$ 569,050.00
Common stock
$ 569,050.00
Date
Description
Debit
Credit
Jan-09
No journal entry is necessary
Feb-28
Treasury stock (41,400 x $28)
$ 1,159,200.00
Cash
$ 1,159,200.00
May-01
Cash dividends
$ 192,372.00
Cash dividend payable
$ 192,372.00
(74,100 x $0.80) + (1,109,100 x $0.12)
Jul-10
Cash dividend payable
$ 192,372.00
Cash
$ 192,372.00
Sep-07
Cash (29,000 x $33)
$ 957,000.00
Treasury stock (29,000*$28)
$ 812,000.00
Paid in capital from sale of Treasury stock
$ 145,000.00
Oct-01
Cash dividends
$ 195,852.00
Cash dividend payable
$ 195,852.00
(74,100 x 1.20) + (1,138,100 x 0.12)
Stock dividends (1,138,100 x 2% x $36)
$ 819,432.00
Stock dividends distributable (1,138,100 x 2% x $25)
$ 569,050.00
Paid in capital in excess of par – Common stock
$ 250,382.00
Dec-01
Cash dividend payable
$ 195,852.00
Cash
$ 195,852.00
Stock dividends distributable
$ 569,050.00
Common stock
$ 569,050.00
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