Early in the year Bill Sharnes and several friends organized a corporation called Sharnes Communication, Inc. the corporation was authorized to issue 50,000 shares of $100 par value, 10 percent cumulative preferred stock and 400,000 shares of $2 per value common stock. The following transactions (amount others) occurred during the year. Jan. 6, I issued for cash 20,000 shares common stock at $14 per share. The shares were issued to Sharnes and 10 other investors. Jan. 7 issued an additional 500 shares of common stock to Sharnes in exchange for his services in organization corporation. The stockholders agreed that these services were worth $7,000. Jan. 12 issue d 2,500 shares of preferred stock cash of $250,000 June14 acquired land as a building site exchange for 15,000 shares of common stock. In view of the appraised value of the land and the progress of the company, the directors agreed that common stock was to be value for purpose of this transaction at $15 per share. Nov. 15 the firs annual dividends of $10 per share was declared on the preferred stock to be paid December 20. Dec. 20 paid cash dividend declared on November 15. Dec. 31 after the revenue and expense were closed int income summary account, that account indicated a net income of $147,200. Prepare journal entries in general journal form to record these transactions. Include entries ta December 31 to close the Income Summary account and the Dividends account. 2. Prepare stockholders; equity section of the shared Communication, Inc., balance sheet at December31
Early in the year Bill Sharnes and several friends organized a corporation called Sharnes Communication, Inc. the corporation was authorized to issue 50,000 shares of $100 par value, 10 percent cumulative
Jan. 6, I issued for cash 20,000 shares common stock at $14 per share. The shares were issued to Sharnes and 10 other investors.
Jan. 7 issued an additional 500 shares of common stock to Sharnes in exchange for his services in organization corporation. The stockholders agreed that these services were worth $7,000.
Jan. 12 issue d 2,500 shares of preferred stock cash of $250,000
June14 acquired land as a building site exchange for 15,000 shares of common stock. In view of the appraised value of the land and the progress of the company, the directors agreed that common stock was to be value for purpose of this transaction at $15 per share.
Nov. 15 the firs annual dividends of $10 per share was declared on the preferred stock to be paid December 20.
Dec. 20 paid cash dividend declared on November 15.
Dec. 31 after the revenue and expense were closed int income summary account, that account indicated a net income of $147,200.
- Prepare
journal entries in general journal form to record these transactions. Include entries ta December 31 to close the Income Summary account and the Dividends account.
2. Prepare
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 2 images
