Dr. Smith started Biotech Inc. (BTE) on October 1, 2020. On October 1, 2020, BTE issued 100 common shares to Dr. Smith in exchange for $10,000 in cash. Also, the following events occurred in December 2020. a) On December 1, 2020, BTE borrowed $1,200,000, 5-year loan, bearing 8% interest. b) On December 10, 2020, BTE issued 1000 preferred Class A shares to investors for $600 each. The articles of incorporation (charter) disclosed that the Class A, non-cumulative preferred shares had a stated value of $ 250 per share. c) On December 28, 2020, BTE declared and paid a 5% stock dividend on the common shares The market value of the common shares before the announcement of the stock dividend was $ 150 per share. d) On December 30, 2020, BTE paid a dividend to the common shareholders of record of $50 per share. Required: Please prepare the necessary journal entries for the above transactions above as well as any adjusting entries required at the year-end date December 31, 2020. Narratives are not required.

Dr. Smith started Biotech Inc. (BTE) on October 1, 2020. On October 1, 2020, BTE issued 100 common shares to Dr. Smith in exchange for $10,000 in cash. Also, the following events occurred in December 2020. a) On December 1, 2020, BTE borrowed $1,200,000, 5-year loan, bearing 8% interest. b) On December 10, 2020, BTE issued 1000 preferred Class A shares to investors for $600 each. The articles of incorporation (charter) disclosed that the Class A, non-cumulative preferred shares had a stated value of $ 250 per share. c) On December 28, 2020, BTE declared and paid a 5% stock dividend on the common shares The market value of the common shares before the announcement of the stock dividend was $ 150 per share. d) On December 30, 2020, BTE paid a dividend to the common shareholders of record of $50 per share. Required: Please prepare the necessary journal entries for the above transactions above as well as any adjusting entries required at the year-end date December 31, 2020. Narratives are not required.

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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Dr. Smith started Biotech Inc. (BTE). on October 1, 2020. On October 1, 2020, BTE issued 100common shares to Dr. Smith in exchange for $10,000 in cash. Also, the following eventsoccurred in December 2020.a) On December 1, 2020, BTE borrowed $1,200,000, 5-year loan, bearing 7% interest.b) On December 10, 2020, BTE issued 1000 preferred Class A shares to investors for $600each. The articles of incorporation (charter) disclosed that the Class A, non-cumulativepreferred shares had a stated value of $ 250 per share.c) On December 28, 2020, BTE declared and paid a 5% stock dividend on the common shares.The market value of the common shares before the announcement of the stock dividend was$ 850 per share.d) On December 30, 2020, BTE paid a dividend to the common shareholders of record of $50per share.Required:Please prepare the necessary journal entries for the above transactions above as well as anyadjusting entries required at the year-end date December 31, 2020. Narratives are NOT…
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