Question

B&J Corporation was established in 2016. B&J has authorized 50,000 shares of common stock, par value...

B&J Corporation was established in 2016. B&J has authorized 50,000 shares of common stock, par value $2 per share, and 10,000 authorized shares of 6% preferred stock, par value $10 per share. Net Income for 2016 was $210,000. The following transactions took place during 2016:

January 1

Issued 30,000 shares of common stock for cash at $20 per share.

February 1

Issued 8,000 shares of preferred stock for cash of $50 per share.

June 1

Repurchased 4,000 shares of L&D common stock at $18 per share.

August 1

Reissued 2,000 shares of the treasury stock at $19 per share.

December 1

Declared cash dividends on Common Stock only totaling $70,000 to be paid on January 15, 2017 to owners on record as of December 31, 2016.

Required: Please show calculations
a)Prepare journal entries for each of the above transactions.

Homework Answers

Answer #1

Journal entries

Date General journal Debit Credit
Jan 1 Cash (30000*20) 600000
Common Stock 60000
Paid in Capital in excess of par value-Common Stock 540000
Feb 1 Cash (8000*50) 400000
Preferred stock 80000
Paid in Capital in excess of par value-preferred stock 320000
June 1 Treasury stock (4000*18) 72000
Cash 72000
Aug 1 Cash (2000*19) 38000
Treasury stock 36000
Paid in capital from sale of treasury stock 2000
Dec 1 Cash dividend 70000
Dividend payable 70000
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