Question

Selected transactions completed by Equinox Products Inc. during the fiscal year ended December 31, 2016, were as follows:

Record on journal page 10:

Jan.	3	Issued 15,000 shares of $20 par common stock at $30, receiving cash.
Feb.	15	Issued 4,000 shares of $80 par preferred 5% stock at $100, receiving cash.
May	1	Issued $500,000 of 10-year, 5% bonds at 104, with interest payable semiannually.
	16	Declared a dividend of $0.50 per share on common stock and $1.00 per share on preferred stock. On the date of record, 100,000 shares of common stock were outstanding, no treasury shares were held, and 20,000 shares of preferred stock were outstanding. Journalize this transaction as a single entry.
	26	Paid the cash dividends declared on May 16.
Jun.	1	Purchased 7,500 shares of Solstice Corp. at $40 per share, plus a $150 brokerage commission. The investment is classified as an available-for-sale investment.
	8	Purchased 8,000 shares of treasury common stock at $33 per share.
	22	Purchased 40,000 shares of Pinkberry Co. stock directly from the founders for $24 per share. Pinkberry has 125,000 shares issued and outstanding. Equinox Products Inc. treated the investment as an equity method investment.
	30	Declared a $1.00 cash dividend per share on preferred stock. On the date of record, 20,000 shares of preferred stock were outstanding.
Jul.	11	Paid the cash dividends declared on Jun. 30 to the preferred stockholders.
Aug.	27	Received $27,500 dividend from Pinkberry Co. investment of Jun. 22.

Record on journal page 11:

Oct.	1	Purchased $90,000 of Dream Inc. 10-year, 5% bonds, directly from the issuing company, at their face amount plus accrued interest of $375. The bonds are classified as a held-to-maturity long-term investment.
	7	Sold, at $38 per share, 2,600 shares of treasury common stock purchased on Jun. 8.
	14	Received a dividend of $0.60 per share from the Solstice Corp. investment on Jun. 1.
	29	Sold 1,000 shares of Solstice Corp. at $45, including commission.
	31	Recorded the payment of semiannual interest on the bonds issued on May 1 and the amortization of the premium for six months. The amortization is determined using the straight-line method.
Dec.	31	Accrued interest for three months on the Dream Inc. bonds purchased on Oct. 1.
	31	Pinkberry Co. recorded total earnings of $240,000. Equinox Products recorded equity earnings for its share of Pinkberry Co. net income.
	31	The fair value for Solstice Corp. stock was $39.02 per share on December 31, 2016. The investment is adjusted to fair value, using a valuation allowance account. Assume Valuation Allowance for Available-for-Sale Investments had a beginning balance of zero.

	Required:
1.	Journalize the selected transactions. Refer to the Chart of Accounts for exact wording of account titles.

Answer 1

Date	Particulars	Amount Dr.	Amount Cr.
3-Jan	Cash A/C Dr. (15,000*30)	$450,000
	To Common Stock A/C. (15,000*20)		$300,000
	To Paid In Capital in excess of Par Value		$150,000
	(Being Common Stock of 15,000 at par value od $20, issued at $30)
15-Feb	Cash A/C Dr. (4000*100)	$400,000
	To Share Capital A/c. (4000*80)		$320,000
	To Security Premium A/c.		$80,000
	(Being 4000 preference shares of par value of $80 issued at a premium of $20)
1-May	Cash A/C Dr.	$500,000
	TO Bond Payable A/C.		$500,000
	(Being $500,000 10 year 5% Bond issued)
16-May	Retained Earnings A/C Dr.	$70,000
	To Dividend Payable A/c. (100,000*$0.5+20000*$1)		$70,000
	(Being Dividend Declared)
26-May	Dividend Payable A/C Dr.	$70,000
	To Cash A/C.		$70,000
	(Being Dividend Paid)