On January 1, Guillen Corporation had 93,000 shares of no-par common stock issue
ID: 2750097 • Letter: O
Question
On January 1, Guillen Corporation had 93,000 shares of no-par common stock issued and outstanding. The stock has a stated value of $7 per share. During the year, the following occurred.
Apr.1Issued 20,500 additional shares of common stock for $18 per share.June15Declared a cash dividend of $2 per share to stockholders of record on June 30.July10Paid the $2 cash dividend.Dec.1Issued 2,000 additional shares of common stock for $18 per share.15Declared a cash dividend on outstanding shares of $3.50 per share to stockholders of record on December 31.
(a)
Prepare the entries, on each of the three dividend dates. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Date
Account Titles and Explanation
Debit
Credit
Date
Account Titles and Explanation
Debit
Credit
Apr. 1June 15July 10Dec. 1Dec. 15
Apr. 1June 15July 10Dec. 1Dec. 15
Apr. 1June 15July 10Dec. 1Dec. 15
Explanation / Answer
Date
Account Title & Explanation
Debit
Credit
June 15
Retained Earning
$ 227,000
Dividend Payable Account
$ 227,000
July 10
Dividend Payable Account
$ 227,000
Cash Account
Payment of cash dividend of $ 2 to 113500 shareholders on record as on June 30th
$ 227,000
Dec 15
Retained Earnings
$ 404,250
Dec 15
Dividend Payable Account
$ 404,250
Date
Account Title & Explanation
Debit
Credit
June 15
Retained Earning
- Declaration of cash dividend of $ 2 per share on 113500 shares (93000 issued on January 1 and 20500 issued on April 1) = 113500*2
$ 227,000
Dividend Payable Account
- $ 2 cash dividend declared for 113500 outstanding shares with record date of June 30th
$ 227,000
July 10
Dividend Payable Account
- Payment of cash dividend declared on June 15 at $ 2 per share on 113500 shares with record date as June 30th
$ 227,000
Cash Account
Payment of cash dividend of $ 2 to 113500 shareholders on record as on June 30th
$ 227,000
Dec 15
Retained Earnings
- Declaration of cash dividend of $ 3.50 per share on 115500 shares (93000 issued on January 1 + 20500 issued on April1 + 2000 issued on December 1) =115500 * 3.50
$ 404,250
Dec 15
Dividend Payable Account
- Declaration of cash dividend of $ 3.50 per share on 115500 shares (93000 issued on January 1 + 20500 issued on April1 + 2000 issued on December 1) =115500 * 3.50
$ 404,250