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 7% 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 $ 850 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. Date Account Debit Credit 10/1/2020 12/1/2020 12/10/2020 12/28/2020 12/30/2020 12/31/2020
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 7% 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
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 $50
per share.
Required:
Please prepare the necessary
Date Account Debit Credit
10/1/2020
12/1/2020
12/10/2020
12/28/2020
12/30/2020
12/31/2020
Step by step
Solved in 2 steps with 1 images
