Question

View transaction list Journal entry worksheet 2 5 6 1 3 Record the resell 90,000 shares of treasury stock for $42 per share. Note: Enter debits before credits. Credit Date General Journal Debit August 15, 2021 Record entry View general journal 4

Answer 1

Requirement 1:

Journal entries:

Date	Account title and explanation	Debit	Credit
Feb 2	Cash [1,200,000 x $32]	$38,400,000
	Common stock [1,200,000 x $5]		$6,000,000
	Paid-in capital in excess of par-common		$32,400,000
	[To record issuance of common stock]
Feb 4	Cash [570,000 x $23]	$13,110,000
	Preferred stock [570,000 x $20]		$11,400,000
	Paid-in capital in excess of par-preferred		$1,710,000
	[To record issuance of common stock]
June 15	Treasury stock [120,000 x $27]	$3,240,000
	Cash		$3,240,000
	[To record purchase of own shares]
Aug 15	Cash [90,000 x $42]	$3,780,000
	Treasury stock [90,000 x $27]		$2,430,000
	Paid-in capital in excess from treasury stock		$1,350,000
	[To record sale of treasury stock]
Nov 1	Dividends	$1,860,000
	Dividends payable-common [1,170,000* x $1.20]		$1,404,000
	Dividends payable-preferred		$456,000
	[To record declaration of dividends]
Nov 30	Dividends payable-common	$1,404,000
	Dividends payable-preferred	$456,000
	Cash		$1,860,000
	[To record payment of cash dividends]

Requirement 2:

Stockholders' equity:

NATIONAL LEAGUE GEAR
Balance Sheet
(Stockholders' Equity section)
December 31,2021
Stockholders' equity:
Common stock	$6,000,000
Preferred stock	$11,400,000
Paid-in capital in excess of par-common	$32,400,000
Paid-in capital in excess of par-preferred	$1,710,000
Paid-in capital in excess from treasury stock	$1,350,000
Total paid-capital	$52,860,000
Retained earnings	$3,010,000
Total paid-in capital and retained earnings	$55,870,000
(Less): Treasury stock	($810,000)
Stockholders' equity	$55,060,000