Please show all the details. Thank you! During its first year of operations, Cup

Question

Please show all the details. Thank you!

During its first year of operations, Cupola Fan Corporation issued 39,000 of $1 par Class B shares for $430,000 on June 30, 2018. Share issue costs were $2,400. One year from the issue date (July 1, 2019), the corporation retired 10% of the shares for $44,000. Required: 1. to 4. Prepare the journal entry to record the issuance of the shares, the declaration of a $2.90 per share dividend on December 1, 2018, the payment of the dividend on December 31, 2018 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.)

Explanation / Answer

Solution: Journal Entries Amount in $ Particulars Debit Credit 30-06-2018 Cash 4,30,000.00 Common Stock     39,000.00 Share Premium 3,91,000.00 (Cash received from issue of common stock at premium) 30-06-2018 Share Issue Expenses       2,400.00 Cash       2,400.00 (Record the share issue expenses) 01-12-2018 Dividend Expenses 1,13,100.00 Dividend Payable 1,13,100.00 (Dividend Payable on common stock) 31-12-2018 Dividend Payable 1,13,100.00 Cash 1,13,100.00 (Record the payment of dividend) 01-07-2019 Common Stock       3,900.00 Premium on redemption     40,100.00 Cash     44,000.00 (Record the share redemption entry) 01-07-2019 Share Premium     40,100.00 Premium on redemption     40,100.00 (Adjust the preimum paid on redemption with the premium on issue) 01-07-2019 Share Premium       3,900.00 Capital Redemption Account       3,900.00 (Capital Redemption Reserve Account is created from share premium)

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