Transaction 4A – Jan. 1, Y5: To expand operations, Jensen Corporation issued 20,
ID: 2589922 • Letter: T
Question
Transaction 4A – Jan. 1, Y5: To expand operations, Jensen Corporation issued 20,000 shares of previously unissued stock with a par value of $2. The selling price for the stock was $10 per share. Give journal entries to record the sale of this stock.
a. Indicate the account title to be debited by $200,000.
Accounts Receivable
Cash
Common Stock
Paid-in Capital in Excess of Par
Retained Earnings
Transaction 4A – Jan. 1, Y5: To expand operations, Jensen Corporation issued 20,000 shares of previously unissued stock with a par value of $2. The selling price for the stock was $10 per share. Give journal entries to record the sale of this stock.
B. Indicate the account title to be credited by $40,000.
Accounts Receivable
Cash
Common Stock
Paid-in Capital in Excess of Par
Treasury Stock
Transaction 4A – Jan. 1, Y5: To expand operations, Jensen Corporation issued 20,000 shares of previously unissued stock with a par value of $2. The selling price for the stock was $10 per share. Give journal entries to record the sale of this stock.
C. Indicate the account title to be credited by $160,000.
Accounts Payable
Cash
Common Stock
Paid-in Capital in Excess of Par
Treasury Stock
Transaction 4B – Sept. 1, Y5: Jensen Corporation purchased in the open market 100 shares of the company’s own common stock at $25 cash per share. Give journal entries to record this transaction.
d. Indicate the account title to be debited by $2,500
Accounts Receivable
Cash
Common Stock
Treasury Stock
None
Transaction 4B – Sept. 1, Y5: Jensen Corporation purchased in the open market 100 shares of the company’s own common stock at $25 cash per share. Give journal entries to record this transaction.
e. Indicate the account title to be credited by $2,500
Accounts Receivable
Cash
Retained Earnings
Treasury Stock
None
Transaction 4C – Dec. 31, Y6: Jensen Corporation has 300,000 shares of common stock authorized, 250,000 shares issued, and 30,000 shares of treasury stock. The company’s board of directors declares a dividend of $1 dollar per share.
f. What is the total amount of the dividend that will be paid?
$30,000
$220,000
$250,000
$270,000
$300,000
A.Accounts Receivable
B.Cash
C.Common Stock
D.Paid-in Capital in Excess of Par
E.Retained Earnings
Explanation / Answer
Transaction 4A-Jensen Corporation issued 20,000 shares of previously unissued stock with a par value of $2. The selling price for the stock was $10 per share. Give journal entries to record the sale of this stock.
a. Indicate the account title to be debited by $200,000 = Cash
B. Indicate the account title to be credited by $40,000 = Common stock
C. Indicate the account title to be credited by $160,000 = Paid in capital in excess of par
Transaction 4B – Sept. 1, Y5: Jensen Corporation purchased in the open market 100 shares of the company’s own common stock at $25 cash per share. Give journal entries to record this transaction.
d. Indicate the account title to be debited by $2,500 = Treasury stock
e. Indicate the account title to be credited by $2,500 = Cash
Transaction 4C – Dec. 31, Y6: Jensen Corporation has 300,000 shares of common stock authorized, 250,000 shares issued, and 30,000 shares of treasury stock. The company’s board of directors declares a dividend of $1 dollar per share.
f. What is the total amount of the dividend that will be paid?
Dividend paid = (250000-30000)*1 = 220000
so answer is b) $220000
Date accounts & explanation debit credit Cash a/c 200000 Common stock a/c 40000 Paid in capital in excess of par value-common stock 160000 (To reocrd issue of common stock)Related Questions
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