During its first year of operations, Cupola Fan Corporation issued 47,000 of $1

Question

During its first year of operations, Cupola Fan Corporation issued 47,000 of $1 par Class B shares for $470,000 on June 30, 2016. Share issue costs were $3,200. One year from the issue date (July 1, 2017), the corporation retired 10% of the shares for $48,000. Required: 1. to 4. Prepare the jounal entry to record the issuance of the shares, the declaration of a $2.60 per share dividend on December 1, 2016, the payment of the dividend on December 31, 2016 and the retirement of the shares. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 2 4 Record the issuance of the shares. Note: Enter debits before credits. Date General Journal Debit Credit June 30, 2016 Record entry Clear entry View general journal

Explanation / Answer

JOURNAL Date General Journal Debit Amount Credit Amount Jun 30, 2016 Cash 470000 Common Stock 47000 Additional paid-in capital - Common stock 423000 (to record issue of common shares) Jun 30, 2016 Miscellaneous expense 3200 Cash 3200 (to record share issue expenses) Dec 1, 2016 Retained earnings (47000*$2.6) 122200 Dividends payable 122200 (to record the declaration of dividend) Dec 31, 2016 Dividends payable 122200 Cash 122200 (to record the payment of dividend) Jul 1, 2017 Treasury stock 48000 Cash 48000 (to record retirement of 4700(10% of 47000) common stock) Jul 1, 2017 Common Stock (4700*$10 4700 Additional paid-in capital - Common stock (4700*$9) 42300 Retained earnings (48000-4700-42300) 1000 Treasury stock 48000 (to record retirement of 4700(10% of 47000) common stock)

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