Tony and Suzie purchased land costing $500,000 for a new camp in January 2020. N
ID: 2595635 • Letter: T
Question
Tony and Suzie purchased land costing $500,000 for a new camp in January 2020. Now they need money to build 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 milon dollars, but unfortunately the bank turned them down as too risky. Undeterred, they promoted their idea to close friends they had made through the outdoor clinics and TEAM events. They decided to go ahead and sell shares of stockin the company to raise the additional funds for the camp Great Adventures has two dasses of stock authorized: 9% $10 par preferred, and $1 par value common. When the company hegan on July 1, 2018, Tony and Suzie each purchased 12,500 shares of $1 par vallue common stock at $1 per share The follawing transactions affect stockholders' equity during 2020, its third year of operations luly 2 Issue an addonal 120,000shaes of common stack for $14 per share September 10 Repurchase 12,000 shares of Its own common stock le, treasury stock) for $17 per share November 15 Relssue 6,000 shares of treasury stock at S18 per share December 1 Declare a cash dlvidend on its common stock of $139,000 ($1 per share) to all stockholders of record on December 15 December 31 Pay the cash dividend declared on December 1 value 10.00 points Required information Required: 1. Record each of these transactions. (If no entry is required for a transaction event, select "No journal entry required" in the first account field.)Explanation / Answer
Journal entry :
Date accounts & explanation debit credit July 2 Cash a/c 1680000 Common stock a/c 120000 Paid in capital in excess of par value 1560000 (TO record issue common stock) Sep 10 Treasury stock 204000 Cash a/c 204000 (To record share reacquired) Nov 15 Cash a/c 108000 Treasury stock a/c 102000 Paid in capital from sale of treasury stock 6000 (TO record reissue of treasury stock) Dec 1 Dividend a/c 139000 Dividend payable a/c 139000 (To record dividend declared) Dec 15 No entry Dec 31 Dividend payable a/c 139000 Cash a/c 139000 (To record dividend paid)