Question

Selected transactions completed by Canyon Ferry Boating Corporation during the current fiscal year are as follows:

Jan.	8	Split the common stock 2 for 1 and reduced the par from $80 to $40 per share. After the split, there were 157,000 common shares outstanding.
Apr.	30	Declared semiannual dividends of $0.65 on 19,000 shares of preferred stock and $0.24 on the common stock payable on July 1.
Jul.	1	Paid the cash dividends.
Oct.	31	Declared semiannual dividends of $0.65 on the preferred stock and $0.11 on the common stock (before the stock dividend). In addition, a 3% common stock dividend was declared on the common stock outstanding. The fair market value of the common stock is estimated at $52.
Dec.	31	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.

Answer 1

SOLUTION

Date	Accounts titles and Explanation	Debit ($)	Credit ($)
Jan.8	No Entry
April 30	Dividends	50,030
	Dividends Payable [(19,000*$0.65)+(157,000*$0.24)]		50,030
July 1	Dividends Payable	50,030
	Cash		50,030
Oct.31	Dividends	29,620
	Dividends Payable [(19,000*$0.65)+(157,000*$0.11)]		29,620
	Retained earnings (157,000*3%*$52)	244,920
	Common Stock Dividend Distributable (157,000*3%*$40)		188,400
	Paid in capital in excess of par		56,520
Dec.31	Dividends Payable	29,620
	Cash		29,620
	Common Stock Dividend distributable	188,400
	Common Stock		188,400