Before preparing financial statements for the current year, the chief accountant for Crane Company discovered the following errors in the accounts. 1. The declaration and payment of $51,000 cash dividend was recorded as a debit to Interest Expense $51,000 and a credit to Cash $51,000.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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am. 274.

Before preparing financial statements for the current year, the
chief accountant for Crane Company discovered the following
errors in the accounts.
1.
2.
3.
1.
The declaration and payment of $51,000 cash dividend was recorded as a debit to Interest Expense $51,000 and a credit to
Cash $51,000.
Prepare the correcting entries at December 31. (Credit account
titles are automatically indented when amount is entered. Do not
indent manually. If no entry is required, select "No Entry" for the
account titles and enter O for the amounts.)
2.
A 10% stock dividend (1,500 shares) was declared on the $13 par value stock when the market price per share was $20. The
only entry made was Stock Dividends (Dr.) $19,500 and Dividend Payable (Cr.) $19,500. The shares have not been issued.
lo. Date Account Titles and Explanation
3.
A 4-for-1 stock split involving the issue of 362,000 shares of $5 par value common stock for 90,500 shares of $20 par value
common stock was recorded as a debit to Retained Earnings $1,810,000 and a credit to Common Stock $1,810,000.
Dec.
31
Dec.
31
Dec.
31
Debit
Credit
Transcribed Image Text:Before preparing financial statements for the current year, the chief accountant for Crane Company discovered the following errors in the accounts. 1. 2. 3. 1. The declaration and payment of $51,000 cash dividend was recorded as a debit to Interest Expense $51,000 and a credit to Cash $51,000. Prepare the correcting entries at December 31. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) 2. A 10% stock dividend (1,500 shares) was declared on the $13 par value stock when the market price per share was $20. The only entry made was Stock Dividends (Dr.) $19,500 and Dividend Payable (Cr.) $19,500. The shares have not been issued. lo. Date Account Titles and Explanation 3. A 4-for-1 stock split involving the issue of 362,000 shares of $5 par value common stock for 90,500 shares of $20 par value common stock was recorded as a debit to Retained Earnings $1,810,000 and a credit to Common Stock $1,810,000. Dec. 31 Dec. 31 Dec. 31 Debit Credit
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