Question

During its first year of operations, Cupola Fan Corporation issued 40,000 of $1 par Class B shares for $435,000 on June 30, 2021. Share issue costs were $2,500. One year from the issue date (July 1, 2022), the corporation retired 10% of the shares for $44,500. Required: 1. to 4. Prepare the journal entries to record the issuance of the shares, the declaration of a $3.00 per share dividend on December 1 2021, the payment of the dividend on December 31, 2021 and the retirement of the shares. (If no entry is required for a transaction/event, select "No journal entry required in the first account field.) View transaction list Journal entry worksheet Record the issuance of the shares Note: Enter debits before credits Date General Journal Debit Credit June 30, 2021 Record entry Clear entry View general Journal < Prev 7 of 108 Next >

Answer 1

Answer
Journal entries
No.	Date	account titles	debit	credit
1	June30,2016	cash	$     432,500
		Common stock		$       40,000
		Paid in capital excess of par		$     392,500
2	Dec1,2016	Retained earnings	$     120,000
		Dividend payable		$     120,000
3	Dec31,2016	Dividend payable	$     120,000
		Cash		$     120,000
4	July1,2017	Common stock	$         4,000
		Paid in capital excess of par	39,250*
		Retained earnings	$         1,250
		Cash		$       44,500
*(432500/40000)×4000=43250-4000=$ 39,250