Question

Ayayai Company reported the following amounts in the stockholders’ equity section of its December 31, 2016, balance sheet.

Preferred stock, 10%, $100 par (10,000 shares authorized, 1,800 shares issued)		$180,000
Common stock, $5 par (93,000 shares authorized, 18,600 shares issued)		93,000
Additional paid-in capital		130,000
Retained earnings		467,000
Total		$870,000

During 2017, Ayayai took part in the following transactions concerning stockholders’ equity.

1.		Paid the annual 2016 $10 per share dividend on preferred stock and a $2 per share dividend on common stock. These dividends had been declared on December 31, 2016.
2.		Purchased 1,500 shares of its own outstanding common stock for $41 per share. Ayayai uses the cost method.
3.		Reissued 800 treasury shares for land valued at $35,600.
4.		Issued 550 shares of preferred stock at $104 per share.
5.		Declared a 10% stock dividend on the outstanding common stock when the stock is selling for $46 per share.
6.		Issued the stock dividend.
7.		Declared the annual 2017 $10 per share dividend on preferred stock and the $2 per share dividend on common stock. These dividends are payable in 2018.

Prepare journal entries to record the transactions described above..

1. Dividends Payable - Common Stock 18000 Dividends Payable Preferred Stock 37200 Cash 55200 2. Treasury Stock 61500 Cash 61500 3. Land 35600 Treasury Stock 32800 Paid-in Capital from Treasury Stock 2800 4. Cash 57200 Preferred Stock 55000 Paid-in Capital in Excess of Par Preferred Stock 2200 5. Retained Earnings 74980 Common Stock Dividend Distributable 8150 Paid-in Capital in Excess of Par - Common Stock 66830 6. Common Stock Dividend Distributable 8150 Common Stock 8150 .Retained Earnings 59360 Dividends Payable Preferred Stock 23500 Dividends Payable - Common Stock 35860

Answer 1