During 2020, Goodfellow has the following transactions involving its common and preferred stock:a.Issued 15,000 shares of $5 par common stock for $15 a share. This brings total shares outstanding to 50,000 shares and 100,000 shares are authorized.b.Issued 5,000 shares of $100 par, 6%, cumulative preferred stock for $121 per share.c.When the market value of the common stock reached $15 a share, Goodfellow declared a 3-for-1 stock split, reducing the par value to $1.67 per share. Required: Prepare a journal entry for each transaction, if required. For grading purposes record the entries on December 31.Prepare a journal entry for each transaction, if required. For grading purposes record the entries on December 31.General Journal InstructionsPAGE 1 GENERAL JOURNAL DATEACCOUNT TITLEPOST. REF.DEBITCREDIT1 2 3 4 5 6 CHART OF ACCOUNTSGoodfellowGeneral Ledger ASSETS111Cash121Accounts Receivable141Inventory152Prepaid Insurance181Equipment198Accumulated Depreciation LIABILITIES211Accounts Payable231Salaries Payable250Unearned Revenue261Income Taxes Payable EQUITY305Preferred Stock311Common Stock318Additional Paid-in Capital on Preferred Stock320Additional Paid-in Capital on Common Stock331Retained Earnings REVENUE411Sales Revenue EXPENSES500Cost of Goods Sold511Insurance Expense512Utilities Expense521Salaries Expense532Bad Debt Expense540Interest Expense541Depreciation Expense559Miscellaneous Expense910Income Tax Expense

The company will increase the financial position by issuing shares, bonds, debentures, etc., These…

Answered: During 2020, Goodfellow has the…

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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During 2020, Goodfellow has the following transactions involving its common and preferred stock:

a.	Issued 15,000 shares of $5 par common stock for $15 a share. This brings total shares outstanding to 50,000 shares and 100,000 shares are authorized.
b.	Issued 5,000 shares of $100 par, 6%, cumulative preferred stock for $121 per share.
c.	When the market value of the common stock reached $15 a share, Goodfellow declared a 3-for-1 stock split, reducing the par value to $1.67 per share.

Required:

Prepare a journal entry for each transaction, if required. For grading purposes record the entries on December 31.

General Journal Instructions

PAGE 1

GENERAL JOURNAL

	DATE	ACCOUNT TITLE	POST. REF.	DEBIT	CREDIT
1
2
3
4
5
6

CHART OF ACCOUNTS

Goodfellow

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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