Prepare Journal entries: selling par value common stock, declaring dividends, paying dividends and more...

Prepare Journal entries for each of the following:

1) Corporation sells 1,000,000 shares of $2.00 par value common stock to the public for a net proceeds of $10,000,000 on 10/1/2000.

2) Corporation declares a $.05 per share dividend units common stock on 9/15/2003. Total shares of common stock issued & outstanding on 9/15/2003 was 1,500,000.

3) Corporation pays the dividend declared in C) on 10/15/2003.

4) Corporation purchases 20,000 shares of its common stock for treasury at a price of $7.50 per share on 6/20/2004.

5) Corporation issues 10,000 shares of treasury stock for a parcel of land with an appraised value of $100,000 on 12/20/04.

6) On 7/1.2005 Corporation declared a 5% stock dividend payable on 8/1/2005 to shareholders of record on 7/15/2005. On 6/30/2005, corporation had a total of 1,750,00 $2 par common shares and the market price was $16.

7) For the year ended 12/31/2005 Corporation reports net income of $1,800.000.

8) On June 25,2004 Corporation declared a 2:1 stock split. Immediately preceding the stock split, they had 3,500,000 shares of $5.00 par value common stock outstanding.

B)
They sold $1,000,000 of 8% , 10 year bonds on July 1,2004 at a price of 107.1 to yield 7.0 %. The bonds pay interest semiannually on July 1 and January and mature on July 1, 2024. Prepare all necessary journal entries to record transactions relating to these bonds during the year 2004. Assume they use straight- line amortization of bond premium.

9) 7/1/2004 Sale of bond

10) 7/31 - 12/31/04 Monthly entry to record interest & amortization.

11) 1/1/2005 Payment of interest

12) What would they record as amortization of bond premium in 2005 if it used the effective interest method.

The entries don't have to be in spreadsheet form, they could be in short answer form. Thank you for all your help.

Solution Summary

You will find the answer to this puzzling question inside...