Answered: Baltimore Bike had outstanding 12,000…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Baltimore Bike had outstanding 12,000 shares of $50 par callable preferred stock. The corporation called 35% of the shares (originally issued at $75 per share) at a call price of $80 per share.

Required:

Record the journal entry for the call of this preferred stock.

Record the journal entry for the call of this preferred stock on December 31.

General Journal Instructions

PAGE 1

GENERAL JOURNAL

	DATE	ACCOUNT TITLE	POST. REF.	DEBIT	CREDIT
1
2
3
4

Baltimore Bike had outstanding 12,000 shares of $50 par callable preferred stock. The corporation called 35% of the shares (originally issued at $75 per share) at a call price of $80 per share.

Required:

Record the journal entry for the call of this preferred stock.

Chart of Accounts

CHART OF ACCOUNTS

Baltimore Bike

General Ledger

	ASSETS
111	Cash
121	Accounts Receivable
141	Inventory
152	Prepaid Insurance
181	Equipment
198	Accumulated Depreciation

	LIABILITIES
211	Accounts Payable
231	Salaries Payable
250	Unearned Revenue
261	Income Taxes Payable

	EQUITY
305	Preferred Stock
311	Common Stock
318	Additional Paid-in Capital on Preferred Stock
320	Additional Paid-in Capital on Common Stock
331	Retained Earnings

	REVENUE
411	Sales Revenue

	EXPENSES
500	Cost of Goods Sold
511	Insurance Expense
512	Utilities Expense
521	Salaries Expense
532	Bad Debt Expense
540	Interest Expense
541	Depreciation Expense
559	Miscellaneous Expense
910	Income Tax Expense

General Journal

Record the journal entry for the call of this preferred stock on December 31.

General Journal Instructions

PAGE 1

GENERAL JOURNAL

	DATE	ACCOUNT TITLE	POST. REF.	DEBIT	CREDIT
1
2
3
4

Baltimore Bike had outstanding 12,000 shares of $50 par callable preferred stock. The corporation called 35% of the shares (originally issued at $75 per share) at a call price of $80 per share.

Required:

Record the journal entry for the call of this preferred stock.

Chart of Accounts

CHART OF ACCOUNTS

Baltimore Bike

General Ledger

	ASSETS
111	Cash
121	Accounts Receivable
141	Inventory
152	Prepaid Insurance
181	Equipment
198	Accumulated Depreciation

	LIABILITIES
211	Accounts Payable
231	Salaries Payable
250	Unearned Revenue
261	Income Taxes Payable

	EQUITY
305	Preferred Stock
311	Common Stock
318	Additional Paid-in Capital on Preferred Stock
320	Additional Paid-in Capital on Common Stock
331	Retained Earnings

	REVENUE
411	Sales Revenue

	EXPENSES
500	Cost of Goods Sold
511	Insurance Expense
512	Utilities Expense
521	Salaries Expense
532	Bad Debt Expense
540	Interest Expense
541	Depreciation Expense
559	Miscellaneous Expense
910	Income Tax Expense

General Journal

Record the journal entry for the call of this preferred stock on December 31.

General Journal Instructions

PAGE 1

GENERAL JOURNAL

	DATE	ACCOUNT TITLE	POST. REF.	DEBIT	CREDIT
1
2
3
4

CHART OF ACCOUNTS

Baltimore Bike

General Ledger

	ASSETS
111	Cash
121	Accounts Receivable
141	Inventory
152	Prepaid Insurance
181	Equipment
198	Accumulated Depreciation

	LIABILITIES
211	Accounts Payable
231	Salaries Payable
250	Unearned Revenue
261	Income Taxes Payable

	EQUITY
305	Preferred Stock
311	Common Stock
318	Additional Paid-in Capital on Preferred Stock
320	Additional Paid-in Capital on Common Stock
331	Retained Earnings

	REVENUE
411	Sales Revenue

	EXPENSES
500	Cost of Goods Sold
511	Insurance Expense
512	Utilities Expense
521	Salaries Expense
532	Bad Debt Expense
540	Interest Expense
541	Depreciation Expense
559	Miscellaneous Expense
910	Income Tax Expense

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