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Equity Journal Entries, and 1-Accounts The stockholders' equity of Fremantle Corporation at January 1 follows: 8 Percent preferred stock, $90 par value, 20,000 shares authorized; 4,000 shares issued and outstanding $360,000 Common stock, $3 par value, 10,000 shares authorized; 40,000 shares issued and outstanding 120,000 Paid-in capital in excess of par value-Preferred stock 200,000 Paid-in capital in excess of par value-Common stock 800,000 Retained earnings 550,000 Total Stockholders' Equity $2,030,000 The following transactions, among others, occurred during the year: Jan. 1 Announced a 2-for-1 common stock split, reducing the par value of the common stock to $1.50 per share. Mar. 31 Converted $60,000 face value of convertible bonds payable (the book value of the bonds was $63,000) to common stock. Each $1,000 bond converted to 125 shares of common stock. June 1 Acquired equipment with a fair market value of $50,000 in exchange for 300 shares of preferred stock. Sept. 1 Acquired 10,000 shares of common stock for cash at $25 per share. Nov. 21 Issued 5,000 shares of common stock at $27 cash per share. Dec. 28 Sold 1,000 treasury shares at $28 per share. 31 Closed net income of $105,000, to the Retained Earnings account. Required a. Set up T-accounts for the stockholders' equity accounts as of the beginning of the year and enter the January 1 balances. HINT: Complete part b. below prior to entering any additional T-account data. Cash Bonds Payable Premium on Bonds Payable Equipment Sep.01 Mar.31 Mar.31 Jun.01 Nov.21 Dec.28

Equity Journal Entries, and 1-Accounts The stockholders' equity of Fremantle Corporation at January 1 follows: 8 Percent preferred stock, $90 par value, 20,000 shares authorized; 4,000 shares issued and outstanding $360,000 Common stock, $3 par value, 10,000 shares authorized; 40,000 shares issued and outstanding 120,000 Paid-in capital in excess of par value-Preferred stock 200,000 Paid-in capital in excess of par value-Common stock 800,000 Retained earnings 550,000 Total Stockholders' Equity $2,030,000 The following transactions, among others, occurred during the year: Jan. 1 Announced a 2-for-1 common stock split, reducing the par value of the common stock to $1.50 per share. Mar. 31 Converted $60,000 face value of convertible bonds payable (the book value of the bonds was $63,000) to common stock. Each $1,000 bond converted to 125 shares of common stock. June 1 Acquired equipment with a fair market value of $50,000 in exchange for 300 shares of preferred stock. Sept. 1 Acquired 10,000 shares of common stock for cash at $25 per share. Nov. 21 Issued 5,000 shares of common stock at $27 cash per share. Dec. 28 Sold 1,000 treasury shares at $28 per share. 31 Closed net income of $105,000, to the Retained Earnings account. Required a. Set up T-accounts for the stockholders' equity accounts as of the beginning of the year and enter the January 1 balances. HINT: Complete part b. below prior to entering any additional T-account data. Cash Bonds Payable Premium on Bonds Payable Equipment Sep.01 Mar.31 Mar.31 Jun.01 Nov.21 Dec.28

FINANCIAL ACCOUNTING
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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### Stockholders’ Equity Transactions, Journal Entries, and T-Accounts **The stockholders' equity of Fremantle Corporation at January 1 follows:** - **8 Percent preferred stock, $90 par value, 20,000 shares authorized; 4,000 shares issued and outstanding - $360,000** - **Common stock, $3 par value, 10,000 shares authorized; 40,000 shares issued and outstanding - $120,000** - **Paid-in capital in excess of par value - Preferred stock - $200,000** - **Paid-in capital in excess of par value - Common stock - $800,000** - **Retained earnings - $550,000** **Total Stockholders' Equity: $2,030,000** | | | |---|---| | 8 Percent preferred stock, $90 par value, 20,000 shares authorized; 4,000 shares issued and outstanding | $360,000 | | Common stock, $3 par value, 10,000 shares authorized; 40,000 shares issued and outstanding | $120,000 | | Paid-in capital in excess of par value - Preferred stock | $200,000 | | Paid-in capital in excess of par value - Common stock | $800,000 | | Retained earnings | $550,000 | | **Total Stockholders' Equity** | **$2,030,000** | **The following transactions, among others, occurred during the year:** - **January 1:** Announced a 2-for-1 common stock split, reducing the par value of the common stock to $1.50 per share. - **March 31:** Converted $60,000 face value of convertible bonds payable (the book value of the bonds was $63,000) to common stock. Each $1,000 bond converted to 125 shares of common stock. - **June 1:** Acquired equipment with a fair market value of $50,000 in exchange for 300 shares of preferred stock. - **September 1:** Acquired 10,000 shares of common stock for cash at $25 per share. - **November 21:** Issued 5,000 shares of common stock at $27 cash per share. - **December 28:** Sold 1,000 treasury shares at $28 per share. - **December 31:** Closed net income of $
Transcribed Image Text:### Stockholders’ Equity Transactions, Journal Entries, and T-Accounts **The stockholders' equity of Fremantle Corporation at January 1 follows:** - **8 Percent preferred stock, $90 par value, 20,000 shares authorized; 4,000 shares issued and outstanding - $360,000** - **Common stock, $3 par value, 10,000 shares authorized; 40,000 shares issued and outstanding - $120,000** - **Paid-in capital in excess of par value - Preferred stock - $200,000** - **Paid-in capital in excess of par value - Common stock - $800,000** - **Retained earnings - $550,000** **Total Stockholders' Equity: $2,030,000** | | | |---|---| | 8 Percent preferred stock, $90 par value, 20,000 shares authorized; 4,000 shares issued and outstanding | $360,000 | | Common stock, $3 par value, 10,000 shares authorized; 40,000 shares issued and outstanding | $120,000 | | Paid-in capital in excess of par value - Preferred stock | $200,000 | | Paid-in capital in excess of par value - Common stock | $800,000 | | Retained earnings | $550,000 | | **Total Stockholders' Equity** | **$2,030,000** | **The following transactions, among others, occurred during the year:** - **January 1:** Announced a 2-for-1 common stock split, reducing the par value of the common stock to $1.50 per share. - **March 31:** Converted $60,000 face value of convertible bonds payable (the book value of the bonds was $63,000) to common stock. Each $1,000 bond converted to 125 shares of common stock. - **June 1:** Acquired equipment with a fair market value of $50,000 in exchange for 300 shares of preferred stock. - **September 1:** Acquired 10,000 shares of common stock for cash at $25 per share. - **November 21:** Issued 5,000 shares of common stock at $27 cash per share. - **December 28:** Sold 1,000 treasury shares at $28 per share. - **December 31:** Closed net income of $
**Educational Content: Understanding Journal Entries and T-Accounts** **Part a:** T-Accounts 1. **Preferred Stock** - Beg.: Debit $0, Credit $0 - Jun. 01: Debit $0, Credit $0 - Bal.: Debit $0, Credit $0 2. **Common Stock** - Beg.: Debit $0, Credit $0 - Mar. 31: Debit $0, Credit $0 - Nov. 21: Debit $0, Credit $0 - Bal.: Debit $0, Credit $0 3. **Paid-in-Capital in Excess of Par Value - Preferred Stock** - Beg.: Debit $0, Credit $0 - Jun. 01: Debit $0, Credit $0 - Bal.: Debit $0, Credit $0 4. **Paid-in-Capital in Excess of Par Value - Common Stock** - Beg.: Debit $0, Credit $0 - Mar. 31: Debit $0, Credit $0 - Nov. 21: Debit $0, Credit $0 - Bal.: Debit $0, Credit $0 5. **Paid-in-Capital from Treasury Stock** - Dec. 28: Debit $0, Credit $0 - Bal.: Debit $0, Credit $0 6. **Treasury Stock - Common** - Sept. 01: Debit $0, Credit $0 - Dec. 28: Debit $0, Credit $0 - Bal.: Debit $0, Credit $0 7. **Retained Earnings** - Bal.: Debit $0, Credit $0 - Dec. 31: Debit $0, Credit $0 - Bal.: Debit $0, Credit $0 **Part b:** Journal Entries for Transactions **General Journal** | Date | Description | Debit ($) | Credit ($) | |---------|--------------------------------------------------|-----------|-------------| | Jan. 01 | (Memorandum) Common Stock split 2 for 1 | 0 | 0 | | Mar. 31 | Premium on Bonds Payable | 0 | | | | Common Stock | | 0 | | | To record conversion of bonds. | 0 |
Transcribed Image Text:**Educational Content: Understanding Journal Entries and T-Accounts** **Part a:** T-Accounts 1. **Preferred Stock** - Beg.: Debit $0, Credit $0 - Jun. 01: Debit $0, Credit $0 - Bal.: Debit $0, Credit $0 2. **Common Stock** - Beg.: Debit $0, Credit $0 - Mar. 31: Debit $0, Credit $0 - Nov. 21: Debit $0, Credit $0 - Bal.: Debit $0, Credit $0 3. **Paid-in-Capital in Excess of Par Value - Preferred Stock** - Beg.: Debit $0, Credit $0 - Jun. 01: Debit $0, Credit $0 - Bal.: Debit $0, Credit $0 4. **Paid-in-Capital in Excess of Par Value - Common Stock** - Beg.: Debit $0, Credit $0 - Mar. 31: Debit $0, Credit $0 - Nov. 21: Debit $0, Credit $0 - Bal.: Debit $0, Credit $0 5. **Paid-in-Capital from Treasury Stock** - Dec. 28: Debit $0, Credit $0 - Bal.: Debit $0, Credit $0 6. **Treasury Stock - Common** - Sept. 01: Debit $0, Credit $0 - Dec. 28: Debit $0, Credit $0 - Bal.: Debit $0, Credit $0 7. **Retained Earnings** - Bal.: Debit $0, Credit $0 - Dec. 31: Debit $0, Credit $0 - Bal.: Debit $0, Credit $0 **Part b:** Journal Entries for Transactions **General Journal** | Date | Description | Debit ($) | Credit ($) | |---------|--------------------------------------------------|-----------|-------------| | Jan. 01 | (Memorandum) Common Stock split 2 for 1 | 0 | 0 | | Mar. 31 | Premium on Bonds Payable | 0 | | | | Common Stock | | 0 | | | To record conversion of bonds. | 0 |
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