Marina Corporation had the following shareholders' equity on January 1, 2020: Common shares, 500,000 shares authorized, 100,000 shares issued and outstanding $300,000 Contributed surplus (Common Shares) 100,000 Retained earnings 500,000 Total shareholders' equity $900,000 The following transactions occurred, in the order given, during 2020. 1. Subscriptions were sold for 20,000 common shares at $5 per share. Each subscription entitled the purchaser to a single share in the company. According to the subscriptions contract, the first payment was for $1 per share. 2. Per the subscriptions contract, the second payment was for the balance of the subscription price ($4 per share). All payments were received on the second payment except for 5,000 shares 3. The subscriptions contract specifies that the first payment will not be refunded to defaulting subscribers; the company retains payments received on any defaulted subscriptions. Also at this point, common shares are issued to subscribers that have fully paid on the contract. 4. A cash dividend of $0.10 per share was declared. The date of record was after the subscription shares were issued. 5. The cash dividend declared in (4) was paid. REQUIRED: Prepare the journal entries to record the transactions for the company for 2020.
Marina Corporation had the following shareholders' equity on January 1, 2020: Common shares, 500,000 shares authorized, 100,000 shares issued and outstanding $300,000 Contributed surplus (Common Shares) 100,000 Retained earnings 500,000 Total shareholders' equity $900,000 The following transactions occurred, in the order given, during 2020. 1. Subscriptions were sold for 20,000 common shares at $5 per share. Each subscription entitled the purchaser to a single share in the company. According to the subscriptions contract, the first payment was for $1 per share. 2. Per the subscriptions contract, the second payment was for the balance of the subscription price ($4 per share). All payments were received on the second payment except for 5,000 shares 3. The subscriptions contract specifies that the first payment will not be refunded to defaulting subscribers; the company retains payments received on any defaulted subscriptions. Also at this point, common shares are issued to subscribers that have fully paid on the contract. 4. A cash dividend of $0.10 per share was declared. The date of record was after the subscription shares were issued. 5. The cash dividend declared in (4) was paid. REQUIRED: Prepare the journal entries to record the transactions for the company for 2020.
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Marina Corporation had the following shareholders' equity on January 1, 2020:
Common shares, 500,000 shares authorized, 100,000 shares issued and
outstanding
$300,000
Contributed surplus (Common Shares)
100,000
Retained earnings
500,000
Total shareholders' equity
$900,000
The following transactions occurred, in the order given, during 2020.
Subscriptions were sold for 20,000 common shares at $5 per share. Each subscription entitled the purchaser to a single share in
the company. According to the subscriptions contract, the first payment was for $1 per share.
1.
2.
Per the subscriptions contract, the second payment was for the balance of the subscription price ($4 per share). All payments were
received on the second payment except for 5,000 shares
3.
The subscriptions contract specifies that the first payment will not be refunded to defaulting subscribers; the company retains
payments received on any defaulted subscriptions. Also at this point, common shares are issued to subscribers that have fully paid on the
contract.
4.
A cash dividend of $0.10 per share was declared. The date of record was after the subscription shares were issued.
5.
The cash dividend declared in (4) was paid.
REQUIRED:
Prepare the journal entries to record the transactions for the company for 2020.
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