Question

The Russell Corporation stockholder's equity consisted of the following on 1/1/20: Stockholder's Equity Paid in Capital 8% Preferred Stock, $100 par value, cumulative, 50.000 shares authorized, 30,000 shares issued and outstanding $ 3,000,000 In excess of par on preferred stock $ 300,000 Total Paid-in-Capital from Preferred Stock $ 3,300,000 Common Stock, no par, $25 stated value, 1,000,000 shares authorized 400.000 shares issued and outstanding 10,000,000 In excess of stated value on common stock $ 600.000 Total Paid-in-Capital from Common Stock $ 10,600,000 Total Paid-in-Capital $ 13,900,000 Retained Earnings (Note A) $ 4,100,000 Total Stockholder's Equity $ 18.000.000 Note A: Preferred stock dividends are in arrears for 2018 and 2019. On the following journal pages, prepare the appropriate journal entries, if any, for the following transactions in 2020. If an entry is not required write the date and "none" in the journal 1/25 Issue 60,000 shares of common stock for $40 per share. 2/18 The Board of Directors declared a cash dividend on preferred and common stock totaling $750,000 payable on March 15, to stockholders of record on February 28 (Record dividends on preferred and common stock in separate accounts. - Check retained earnings Note A) 2/28 Date of record for cash dividends on preferred and common stock 3/15 Paid the 2/18 cash dividend. 5/20 Declared a 10% stock dividend, distributable on June 15, to stockholders of record on May 31 The market value of neeell Comoration's common stock wa $45 ner share

Answer 1

Date	Account titles and explanation	Debit	Credit
Jan 25	Cash (60000*40)	$2,400,000
	Paid in capital excess of stated value - common stock (60000*(40-25))		$900,000
	Common stock (60000*25)		$1,500,000
	(To record issue of common stock.)
Feb 18	Cash Dividends	$750,000
	Dividend Payable - Preferred (3000000*8%*2 years)		$480,000
	Dividend Payable - Common (750000-480000)		$270,000
	(To record Dividend declared.) (The previous period's unpaid dividend will be paid if the preference share is cumulative.)
Feb 28	None (Journal entry would not required)
March 15	Dividend Payable - Preferred	$480,000
	Dividend Payable - Common	$270,000
	Cash		$750,000
	(To record Dividend paid.)
May 20	Stock dividends (46000*45)	$2,070,000
	Paid in capital excess of par value - common (46000*(45-25))		$920,000
	Common stock dividend distributable (46000*25)		$1,150,000
	(To record Stock Dividend Declared.) (Common shares outstanding's = 400000+60000=460000) (460000*10%=46000)
May 31	None (Journal entry would not required)
June 15	Common stock dividend distributable	$1,150,000
	Common stock		$1,150,000
	(To record Stock Dividend Distributed.)
July 10	Treasury Stock (50000*43)	$2,150,000
	Cash		$2,150,000
	(To record purchased its own stock .)
Aug 13	Cash (12000*45)	$540,000
	Paid in capital from treasury stock transactions (12000*(45-43))		$24,000
	Treasury stock (12000*43)		$516,000
	(To record treasury stock sold.)
Nov 12	Cash (20000*25)	$500,000
	Paid in capital from treasury stock transactions (From above transactions)	$24,000
	Retained earnings (860000-500000-24000)	$336,000
	Treasury Stock (20000*43)		$860,000
	(To record treasury stock sold.)