Question

Orange Office Supply Corporation completed the following stock issuance transactions: January 2, 2018 Issued 5,000 shares...

Orange Office Supply Corporation completed the following stock issuance transactions: January 2, 2018 Issued 5,000 shares of $4 stated value common stock for cash of $20 per share January 31, 2018 Received merchandise inventory with a market value of $46,000 in exchange for 2,000 shares of the $4 stated value common stock when the market price was $22. March 1, 2018 Issued 450 shares of 5%, $20 par value, cumulative, preferred stock for $50 per share July 1, 2019 Board declared the full preferred stock dividend. August 1, 2019 Board declared a $0.20 per share cash dividend on the common stock and the full preferred cash dividend August 25, 2019 Payment of cash dividend of preferred stock August 26, 2019 Payment of cash dividend of common stock a.) Prepare the journal entries to record these transactions.

Homework Answers

Answer #1

Journal entry

Date account and explanation Debit Credit
Jan 2 Cash (5000*20) 100000
Common Stock (5000*4) 20000
Paid in Capital in excess of stated value-Common Stock 80000
Jan 31 Merchandise inventory 46000
Common Stock (2000*4) 8000
Paid in Capital in excess of stated value-Common Stock 38000
Mar 1 Cash (450*50) 22500
Preferred stock (450*20) 9000
Paid in Capital in excess of par value-Preferred stock 13500
July 1 Cash dividend (450*20*5%) 450
Preferred dividend payable 450
Aug 1 Cash dividend 1850
Common Dividend payable (7000*.20) 1400
Preferred dividend payable 450
Aug 25 Preferred dividend payable 900
Common Dividend payable 1400
Cash 2300
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