Question

Record the following 2018 transctions for the Sears Corporation in the journal. Additional information you will need: when Sears began operations several years ago, they were authorized to issue 200,000 shares of 7%, $100 par value preferred stock and 6,000,000 shares of $4 par value common stock.

Jan. 1 Issued 500,000 shares of common stock for cash at $11 per share.

Feb. 2 Issued 30,000 shares of preferred stock for cash at $105 per share.

Mar. 3 Declared a cash dividend on the preferred stock $385,000.

Apr. 4 Discovered a $13,000 overstatement of 2015 depreciation.

May 5 Paid the cash dividend declared of March 3.

June 6 Issued 4,000 shares of common stock for land that was advertised for sale at $51,000. The stock market price of the stock is $15 per share.

Sept. 9 Sears purchased 8,000 shares of its own common stock at $14 per share.

Oct. 10 Sold 3,000 shares of treasury stock for $18 per share

Nov. 11 Declared a $0.60 cash dividend per share on common stock for a total of $896,400.

Dec. 31 Record the net income for the year, $950,000.

Answer 1

Date	Account Titles and Explanation	Debit	Credit
Jan-01	Cash (5,00,000 X $11)	$ 55,00,000
	Common stock (5,00,000 X $4)		$ 20,00,000
	Paid-in-capital in excess of par, Common stock		$ 35,00,000
	(Being common shares issued)
Feb-02	Cash (30,000 X $105)	$ 31,50,000
	Preferred stock (30,000 X $100)		$ 30,00,000
	Paid-in-capital in excess of par, Preferred stock		$   1,50,000
	(Being Preferred shares issued)
Mar-03	Cash Dividend - Preferred stock	$   3,85,000
	Cash Dividend Payable		$   3,85,000
	(Being Cash dividend payable recorded)
Apr-04	Retained earnings	$       13,000
	Accumulated depreciation		$       13,000
May-05	Cash Dividend Payable	$   3,85,000
	Cash		$   3,85,000
	(Being Cash dividend paid)
Jun-06	Cash	$       51,000
	Common stock (4,000 X $4)		$       16,000
	Paid-in-capital in excess of par, Common stock		$       35,000
	(Being common shares issued)
Sep-09	Treasury stock (8,000 X $14)	$   1,12,000
	Cash		$   1,12,000
	(Being Treasury stock issued)
Oct-10	Cash (3,000 X $18)	$       54,000
	Treasury stock (3,000 X $14)		$       42,000
	Paid-in-capital in excess of par, Treasury stock		$       12,000
	(Being Treasury stock sold)
Nov-11	Cash Dividend - Common stock	$   8,96,400
	Cash Dividend Payable		$   8,96,400
	(Being Cash dividend payable recorded)
Dec-31	Net Income	$   9,50,000
	Retained earnings		$   9,50,000