Problem

Journalizing stockholders’ equity transactions [20-25 min]Dearborn Manufacturing, Co., com...

Journalizing stockholders’ equity transactions [20-25 min]

Dearborn Manufacturing, Co., completed the following transactions during 2012:

Jan 6

Declared a cash dividend on the 6%, $95 par preferred stock (1,000 shares outstanding). Declared a $0.55 per share dividend on the 90,000 shares of common stock outstanding.The date of record is January 31, and the payment due date is February 15.

Feb 15

Paid the cash dividends.

Jun 10

Split common stock 2 for 1. Before the split, Dearborn had 90,000 shares of $10 par common stock outstanding.

Jul 30

Distributed a 30% stock dividend on the common stock. The market value of the common stock was $12 per share.

Oct 26

Purchased 3,000 shares of treasury stock at $10 per share.

Nov 8

Sold 1,500 shares of treasury stock for $11 per share.

Nov30

Sold 700 shares of treasury stock for $7 per share.

Requirement

1. Record the transactions in Dearborn’s general journal.

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