Tony and Suzie purchased land costing $500,000 for a new camp in January 2020. N
ID: 2534929 • Letter: T
Question
Tony and Suzie purchased land costing $500,000 for a new camp in January 2020. Now they need money to bulld the cabins, dining facility, a ropes course, and an outdoor swimming pool. Tony and Suzie first checked with Summit Bank to see if they could borrow another millilon dollars, but unfortunately the bank turned them down as too risky. Undeterred, they promoted thelr Idea to close friends they had made through the outdoor clinics and TEAM events. They decided to go ahead and sell shares of stock in the company to raise the additional funds for the camp. Great Adventures has two classes of stock authonzed: 7%, $10 par preferred, and $1 par value common. When the company began on July 1, 2018, Tony and Suzie each purchased 15,000 shares of $1 par value common stock at $1 per share. The following transactions offect stockholders equity during 2020, Its third year of operations: July 2 Issue an additional 100,000 shares of common stock for $14 per share. September 10 Repurchase 10.000 shares of its own common stock (le, treasury stock) for $17 per share November 15 Relssue 5,000 shares of treasury stock at $18 per share December 1 Declare a cash dividend on its common stock of $125,000 ($1 per share) to all stockholders of record on December 15. December 31 Pay the cash divdend declared on December 1 volue Required Information 10.00 points Required 1. Record each of these transactions. (If no entry is required for a transactionlevent, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Issue an additional 100,000 shares of common stock for $14 per share. Note: Enter debits bafore crodits. Date General Journal Debit July 02, 2020 Record entry Clear entry View general journalExplanation / Answer
Date Account Debit Credit July 2 Cash 100000*14 1400000 Common Stock 100000*1 100000 Additional Paid-in-Capital 100000*13 1300000 Sep 10 Treasury Stock 170000 Cash 170000 Nov 15 Cash 5000*18 90000 Treausry Stock 5000*17 85000 Additional Paid-In-Capital 5000 Dec 1 Retained Earning 125000 Dividend Payable 125000 Dec 31 Dividend Payable 125000 Cash 125000 Shareholder's Equity Section Stockholder Equity: Common Stock (working-1) 125000 Additional Paid in Capital (1300000+5000) 1305000 Total Paid in Capital 1430000 Retained Earning (Working-2) 169000 Treasury Stock (170000-85000) -85000 Total Stockholder Equity 1514000 Working-1 Common Stock: Beginning 15000 Each tom and suzie 30000 Add: New Issue 100000 Less: Purchase -10000 Add: Reissue 5000 No of Share outstanding end of 2020 125000 Par Value 1 Total Value 125000 Working-2 Beginning Retained Earning 142000 ADD: Net Income of 2020 152000 Less: Dividend Paid -125000 Ending Retained Earning 169000