90.2K

Verified Solution

Link Copied!

Question three $($Q$3)$:

Earth Star Diamonds Inc. began a potentially lucrative mining operation on October $1,2023.$ The following transactions and events occurred in the month of October:

Sunday, October $01,2023$ Issued for cash, $1,000$ shares of the preferred shares at $$4\mathrm{.}70$ each.

Tuesday, October $10,2023$ Issued for cash, $49,000$ shares of the common shares at $$3\mathrm{.}50$ per share.

October $152023$ Earth star purchased land for $$185,000,$ paying cash of $$65,500$ and borrowing the balance from the bank $($to be repaid in $2$ years$).$

October $24202314,500$ preferred shares were issued today for total cash proceeds of $$81,635.$

October $202023$ Annual dividend on the preferred shares were declared.

October $202023$ Dividend on commons shares of $$26,870$ were declared payable on November $15,2023$

October $312023$ the Income Summary account has $595,000$ credit balance. Close the Income Summary and Dividend accounts.

Q$3$ Required:

Prepare journal entries to record the transactions and closing for $2023.$ No need to provide journal description.

Use the journal worksheet provided below. Also, use the applicable accounts provided below.

The company uses a Cash Dividend account when dividends are declared.

Q$3$ Journal Entries:

$81$

$87$

$88$

$89$

$90$

$91$

$92$

General Journal

Answer & Explanation Solved by verified expert

See Answer