Easter Bunny Inc. has been in business for 5 years. They have employed you as a staff accountant. At the start of the year, they have 150,000 shares of common stock outstanding (par value of $1), no preferred stock, 10,000 shares of treasury stock (bought for $18/share), and retained earnings of $720,000. During the year, the following events occur:January 1 - Issue 15,000 shares of common stock (par value of $1) for $23/share.February 28 - The Board of Directors declares a cash dividend of $0.25/share. The date of record will be March 15.March 15 - The Board of Directors compiles the list of stockholders on the Date of Record for the cash dividend.March 23 - The cash dividend is paid out to stockholders on record.June 3 - Easter Bunny sells 8,000 shares of its treasury stock for $26/share.July 1 - Easter Bunny's Board of Directors decides to issue a 30% stock dividend, to be issued immediately. Market value of the stock is $12/share.September 10 - Easter Bunny sells 1,000 shares of treasury stock for $8/share.November 14 - The company's Board of Directors decides to issue a 4:1 stock split.Make the journal entries for the above events.

Journal includes recording of financial transactions chronologically using double entity concept.

Answered: Easter Bunny Inc. has been in business…

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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Easter Bunny Inc. has been in business for 5 years. They have employed you as a staff accountant. At the start of the year, they have 150,000 shares of common stock outstanding (par value of $1), no preferred stock, 10,000 shares of treasury stock (bought for $18/share), and retained earnings of $720,000. During the year, the following events occur:

January 1 - Issue 15,000 shares of common stock (par value of $1) for $23/share.
February 28 - The Board of Directors declares a cash dividend of $0.25/share. The date of record will be March 15.
March 15 - The Board of Directors compiles the list of stockholders on the Date of Record for the cash dividend.
March 23 - The cash dividend is paid out to stockholders on record.
June 3 - Easter Bunny sells 8,000 shares of its treasury stock for $26/share.
July 1 - Easter Bunny's Board of Directors decides to issue a 30% stock dividend, to be issued immediately. Market value of the stock is $12/share.
September 10 - Easter Bunny sells 1,000 shares of treasury stock for $8/share.
November 14 - The company's Board of Directors decides to issue a 4:1 stock split.

Make the journal entries for the above events.

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