Question

1. On Oct 1, 2020, Mia Corporation had 90,000 shares of $5 par value common stock issued and outstanding. During the year, the following transactions occurred:

Oct 15

Issued 30,000 shares of common stock at $15.

Dec 1

Declared a cash dividend of $3.00 per share to stockholders of record on December 15.

Dec 30

Paid the cash dividend.

Dec 31 Net Income for the year, $2,050,000

Instructions

Prepare journal entries to record the above transactions (Oct. 15, december 1, 15 and 30)

Answer 1

Answer
Date	Account titles and explanation	Debit	Credit
Oct-15	Cash (30000*15)	$4,50,000
	Common stock (30000*5)		$1,50,000
	Paid in capital in excess of par value - common stock		$3,00,000
	(To record common stock issue)
Dec-01	Retained earnings (90000+30000)*3	$3,60,000
	Dividend payable		$3,60,000
	(To record cash dividend declared)
Dec-15	No JE required for record date
Dec-30	Dividend payable	$3,60,000
	Cash		$3,60,000
	(To record cash dividend Paid)