Carlyon Company listed the following items in its December 31, Year 1, financial statements: Investment in Man Company bonds $21,000 Dividends payable: preferred 4,000 Dividends payable: common 50,000 Preferred stock, 8%, $100 par 100,000 Common stock, $10 par 500,000 Additional paid-in capital on preferred stock 20,000 Additional paid-in capital on common stock 262,500 Retained earnings 270,000 During Year 2, the following transactions occurred: Feb. 2 Paid the semiannual dividends declared on December 15, Year 1. Mar. 5 Declared a property dividend, payable to common shareholders on April 5 in Man Company bonds being held to maturity. The bonds (which have a book value of $21,000) have a current market value of $30,000. Apr. 5 Paid the property dividend. Jul. 6 Declared a $4 per share semiannual cash dividend on preferred stock and a $1.10 per share semiannual dividend on common stock, to be paid on August 17. Aug. 17 Paid the cash dividends. Oct. 15 Declared a 2% stock dividend on common stock to be issued on December 3. The current market price is $22 per share. Dec. 3 Issued the stock dividend. 28 Declared a $4 and $1.20 per share semiannual cash dividend on preferred and common stock, respectively, to be paid on February 15, Year 3. Required: Next Level Prepare journal entries to record the preceding transactions.

26th Edition

ISBN:9781285743615

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter15: Investments And Fair Value Accounting

Section: Chapter Questions

Problem 15.4CPP: Selected transactions completed by Equinox Products Inc. during the fiscal year ended December 31,...

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Question

Carlyon Company listed the following items in its December 31, Year 1, financial statements:

Investment in Man Company bonds	$21,000
Dividends payable: preferred	4,000
Dividends payable: common	50,000
Preferred stock, 8%, $100 par	100,000
Common stock, $10 par	500,000
Additional paid-in capital on preferred stock	20,000
Additional paid-in capital on common stock	262,500
Retained earnings	270,000

During Year 2, the following transactions occurred:

Feb.	2	Paid the semiannual dividends declared on December 15, Year 1.
Mar.	5	Declared a property dividend, payable to common shareholders on April 5 in Man Company bonds being held to maturity. The bonds (which have a book value of $21,000) have a current market value of $30,000.
Apr.	5	Paid the property dividend.
Jul.	6	Declared a $4 per share semiannual cash dividend on preferred stock and a $1.10 per share semiannual dividend on common stock, to be paid on August 17.
Aug.	17	Paid the cash dividends.
Oct.	15	Declared a 2% stock dividend on common stock to be issued on December 3. The current market price is $22 per share.
Dec.	3	Issued the stock dividend.
	28	Declared a $4 and $1.20 per share semiannual cash dividend on preferred and common stock, respectively, to be paid on February 15, Year 3.