Question

Time: 04:02 PM / Remaining: 4 min CALCULATOR PRINTER VERSION 4 CE Question 19 On January 1, 2018, Magnus Corporation had 60,000 shares of $1 par value common stock issued and outstanding. During the year, the folowing transactions occurred: Mar. 1 Issued 35,000 shares of common stock for $550,000. June 1 Declared a cash dividend of $2.00 per share to stockholders of record on June 15 July 30 Paid the $2.00 cash dividend. Dec. 1 Purchased 5,000 shares of common stock for the treasury for $22 per share. Dec. 15 Declared a cash dividend on outstanding shares of $2.20 per share to stockholders of record on December 31. Prepare journal entries to record the above transactions. (If no entry is required, select "No entry for the account titles and enter o for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Answer 1

Solution:

Mar-01	Cash a/c Dr	5,50,000
	To common stock a/c		35,000
	To paid in capital in excess of par a/c		5,15,000
Jun-01	Cash dividends a/c Dr (60000 + 35000) x 2	190000
	To dividends payable a/c		190000
Jun-30	Dividends payable a/c Dr	190000
	To cash a/c		190000
Dec-01	Treasury stock a/c Dr (5000 x 22)	110000
	To cash a/c		110000
Dec-15	Cash dividends a/c Dr (60000 + 35000 - 5000) x 2.2	198000
	To dividends payable a/c		198000