Question

Problem 15-1 (Part Level Submission) On January 5, 2017, Blue Corporation received a charter granting the right to issue 5,400 shares of $100 par value, 7% cumulative and nonparticipating preferred stock, and 46,800 shares of $10 par value common stock. It then completed these transactions. Jan. 11 Issued 19,700 shares of common stock at $16 per share. Feb. 1 Issued to Sanchez Corp. 3,800 shares of preferred stock for the following assets: equipment with a fair value of $46,000; a factory building with a fair value of $160,000; and land with an appraised value of $247,000. July 29 Purchased 1,700 shares of common stock at $16 per share. (Use cost method.) Sold the 1,700 treasury shares at $15 per share Aug. 10 Declared a $0.40 per share cash dividend on the common stock and declared the preferred dividend Dec. 31 Dec. 31 Closed the Income Summary account. There was a $168,200 net income. (a) Record the journal entries for the transactions listed above. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record entries in the order displayed in the problem statement. Round answers to 0 decimal places, e.g. $5,275.) Account Titles and Explanation Debit Date Credit

Answer 1

Date	Account Titles and Explanation	Debit	Credit
11-Jan	Cash (19700*16)	$ 3,15,200
	Common stock (19700*10)		$ 1,97,000
	Paid in capital in excess of par-Common stock [19,700*($16-$10)]		$ 1,18,200
	(To record the issue of common stock)
01-Feb	Equipment	$     46,000
	Building	$ 1,60,000
	Land	$ 2,47,000
	Preferred stock (3800*100)		$ 3,80,000
	Paid in capital in excess of par- Preferred stock (Bal. fig)		$     73,000
	(To record the purchase of assets in exchange of preferred stock)
29-Jul	Treasury stock (1700*$16)	$     27,200
	Cash		$     27,200
	(To record the purchase of treasury stock)
10-Aug	Cash (1700*$15)	$     25,500
	Retained earnings [1700*($16-$15)]	$       1,700
	Treasury stock (1700*$16)		$     27,200
	(To recotd the sale of treasury stock)
31-Dec	Retained earnings	$     34,480
	Cash dividend payable -Common stock (19,700*$0.40)		$       7,880
	Cash dividend payable - Preferred stock ($380,000*7%)		$     26,600
	(To record the dividends declared)
31-Dec	Income summary	$ 1,68,200
	Retained earnings		$ 1,68,200
	(To close the income summary account)