70.2K

Verified Solution

Link Copied!

Required information

Problem 10-6A Record equity transactions and prepare the stockholders' equity section (LO10-2, 10-3, 10-4, 10-5, 10-7)

[The following information applies to the questions displayed below.]

Major League Apparel has two classes of stock authorized: 5%, $10 par preferred, and $1 par value common. The following transactions affect stockholders equity during 2021, its first year of operations:

January		2		Issue 100,000 shares of common stock for $58 per share.
February		14		Issue 48,000 shares of preferred stock for $11 per share.
May		8		Purchase 10,000 shares of its own common stock for $48 per share.
May		31		Resell 5,000 shares of treasury stock for $53 per share.
December		1		Declare a cash dividend on its common stock of $0.60 per share and a $24,000 (5% of par value) cash dividend on its preferred stock payable to all stockholders of record on December 15. The dividend is payable on December 30. (Hint: Dividends are not paid on treasury stock.)
December		30		Pay the cash dividends declared on December 1.

Problem 10-6A Part 1

Required:

1. Record each of these transactions. (If no entry is required for a particular transaction, select "No Journal Entry Required" in the first account field.)

• Record the issuance of 100,000 shares of common stock for $58 per share.

• Note: Enter debits before credits.

  	Date General Journal Debit Credit January 02, 2021

• Record the issuance of 48,000 shares of preferred stock for $11 per share.

Note: Enter debits before credits.

	Date General Journal Debit Credit February 14, 2021

• Record the purchase of 10,000 shares of its own common stock for $48 per share.

Note: Enter debits before credits.

	Date General Journal Debit Credit May 08, 2021

• Record the resell of 5,000 shares of treasury stock for $53 per share.

Note: Enter debits before credits.

	Date General Journal Debit Credit May 31, 2021

• Record the declaration of a cash dividend on its common stock of $0.60 per share and a $24,000 (5% of par value) cash dividend on its preferred stock payable to all stockholders. The dividend is payable on December 30. (Hint: Dividends are not paid on treasury stock.)

Note: Enter debits before credits.

	Date General Journal Debit Credit December 01, 2021

• Record the declaration of a cash dividend payable to stockholders of record on December 15.

Note: Enter debits before credits.

	Date General Journal Debit Credit December 15, 2021

• Record the payment of the cash dividends declared on December 1.

Note: Enter debits before credits.

	Date General Journal Debit Credit December 30, 2021

Answer & Explanation Solved by verified expert

See Answer