Question

Selected transactions completed by ATV Discount Corporation during the current fiscal year are as follows:

Jan. 5. Split the common stock 3 for 1 and reduced the par from $75 to $25 per share. After the split, there were 1,092,000 common shares outstanding.

Mar. 10. Purchased 39,500 shares of the corporation’s own common stock at $29, recording the stock at cost.

Apr. 30. Declared semiannual dividends of $0.60 on 74,300 shares of preferred stock and $0.14 on the common stock to stockholders of record on May 15, payable on June 15.

June 15. Paid the cash dividends.

Aug. 20. Sold 28,500 shares of treasury stock at $33, receiving cash.

Oct. 15 Declared semiannual dividends of $0.60 on the preferred stock and $0.14 on the common stock (before the stock dividend). In addition, a 5% common stock dividend was declared on the common stock outstanding. The fair market value of the common stock is estimated at $38. The dividend date of record is November 15 payable on December 19.

Dec. 19. 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.

CHART OF ACCOUNTS

ATV Discount Corporation

General Ledger

ASSETS

110 Cash

120 Accounts Receivable

131 Notes Receivable

132 Interest Receivable

141 Merchandise Inventory

145 Office Supplies

151 Prepaid Insurance

181 Land

193 Equipment

194 Accumulated Depreciation-Equipment

LIABILITIES

210 Accounts Payable

221 Notes Payable

226 Interest Payable

231 Cash Dividends Payable

241 Salaries Payable

261 Mortgage Note Payable

EQUITY

311 Common Stock

312 Paid-In Capital in Excess of Par-Common Stock

315 Treasury Stock

321 Preferred Stock

322 Paid-In Capital in Excess of Par-Preferred Stock

331 Paid-In Capital from Sale of Treasury Stock

340 Retained Earnings

350 Stock Dividends Distributable

351 Cash Dividends

352 Stock Dividends

390 Income Summary

REVENUE

410 Sales

610 Interest Revenue

EXPENSES

510 Cost of Merchandise Sold

515 Credit Card Expense

520 Salaries Expense

531 Advertising Expense

532 Delivery Expense

533 Selling Expenses

534 Rent Expense

535 Insurance Expense

536 Office Supplies Expense

537 Organizational Expenses

562 Depreciation Expense-Equipment

590 Miscellaneous Expense

710 Interest Expense

Answer 1