Selected transactions completed by Canyon Ferry Boating Corporation during the c

Question

Selected transactions completed by Canyon Ferry Boating Corporation during the current fiscal year are as follows:

Jan. 8 Split the common stock 2 for 1 and reduced the par from $70 to $35 per share. After the split, there were 131,000 common shares outstanding.

Apr. 30 Declared semiannual dividends of $0.80 on 18,500 shares of preferred stock and $0.22 on the common stock payable on July 1.

Jul. 1 Paid the cash dividends.

Oct. 31 Declared semiannual dividends of $0.80 on the preferred stock and $0.13 on the common stock (before the stock dividend). In addition, a 4% common stock dividend was declared on the common stock outstanding. The fair market value of the common stock is estimated at $50.

Dec. 31 Paid the cash dividends and issued the certificates for the common stock dividend.

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.

Explanation / Answer

general Entries

date

explanation

debit

credit

1-

8-Jan

no journal entry

2-

30-Apr

retained earning

43620

dividend payable on commons stock

28820

dividend payable on preferred stock

14800

3-

1-Jul

dividend payable on commons stock

28820

dividend payable on preferred stock

14800

cash

43620

4-

31-Oct

retained earning

31830

dividend payable on commons stock

17030

dividend payable on preferred stock

14800

5-

31-Oct

retained earning

262000

common stock

262000

6-

31-Dec

dividend payable on commons stock

17030

dividend payable on preferred stock

14800

cash

31830

general Entries

date

explanation

debit

credit

1-

8-Jan

no journal entry

2-

30-Apr

retained earning

43620

dividend payable on commons stock

28820

dividend payable on preferred stock

14800

3-

1-Jul

dividend payable on commons stock

28820

dividend payable on preferred stock

14800

cash

43620

4-

31-Oct

retained earning

31830

dividend payable on commons stock

17030

dividend payable on preferred stock

14800

5-

31-Oct

retained earning

262000

common stock

262000

6-

31-Dec

dividend payable on commons stock

17030

dividend payable on preferred stock

14800

cash

31830

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