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Comprehensive Problem 4

Part 1:

Selected transactions completed by Equinox Products Inc. during the fiscal year ended December 31, 20Y8, were as follows:

1. Journalize the selected transactions.

If no entry is required, select "No entry required" from the dropdown and leave the amount boxes blank. For a compound transaction, if an amount box does not require an entry, leave it blank.

a. Issued 15,000 shares of $20 par common stock at $30, receiving cash.

Description	Debit	Credit
Cash
Common Stock
Paid-In Capital in Excess of Par-Common Stock

b. Issued 4,000 shares of $80 par preferred 5% stock at $100, receiving cash.

Description	Debit	Credit
Cash
Preferred Stock
Paid-In Capital in Excess of Par-Preferred Stock

c. Issued $500,000 of 10-year, 5% bonds at 104, with interest payable semiannually.

Description	Debit	Credit
Cash
Bonds Payable
Premium on Bonds Payable

d. Declared a quarterly 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 the common stock and the preferred stock entries separately.

Description	Debit	Credit
Cash Dividends
Cash Dividends Payable
Common stock
Cash Dividends
Cash Dividends Payable
Preferred stock

e. Paid the cash dividends declared in (d).

Description	Debit	Credit
Cash Dividends Payable
Cash

f. Purchased 8,000 shares of treasury common stock at $33 per share.

Description	Debit	Credit
Treasury Stock
Cash

g. Declared a $1.00 quarterly cash dividend per share on preferred stock. On the date of record, 20,000 shares of preferred stock had been issued.

Description	Debit	Credit
Cash Dividends
Cash Dividends Payable

h. Paid the cash dividends to the preferred stockholders.

Description	Debit	Credit
Cash Dividends Payable
Cash

i. Sold, at $38 per share, 2,600 shares of treasury common stock purchased in (f).

Description	Debit	Credit
Cash
Treasury Stock
Paid-In Capital from Sale of Treasury Stock

j. Recorded the payment of semiannual interest on the bonds issued in (c) and the amortization of the premium for six months. The amortization is determined using the straight-line method.

Description	Debit	Credit
Interest Expense
Premium on Bonds Payable
Cash

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