Requirement 2 (50%) Record the following transactions in the General Journal: Jan 1 When the market rate was 12%, Winnifred Corp. issued $2,000,000, 14%, 5-year bonds. Interest is payable semiannually on June 30 and December 31. The corporation uses the effective interest method of amortizing bond premium or discount. (It would be a good idea to construct a bond amortization schedule) Issued 20,000 Common Shares for 50,000 cash. Jan 1 Mar 5 Mar 10 Mar 15 Declared cash dividends in the amount of $50,000 to be distributed to the shareholders of record on March 9 Dividends will be paid on March 15. Declared a 1 for 2 stock split on Common Shares outstanding. Paid the cash dividend declared on Mar 5. Jun 30 July 20 Repurchased 10,000 common shares, the market price was $5 per share. Made the first interest payment on the bond. The company uses the effective interest method. July 31 Sept 30 Jun 30 Made the first interest payment on the bond. The company uses the effective interest method. July 20 Repurchased 10,000 common shares, the market price was $5 per share. Issued 10,000 Preferred shares for 180,000 cash. Declared a 10% common stock dividend to shareholders of record on Oct 15. Market price at the time was $6 per share. Shares will be distributed Nov 25. Nov 25 Distributed the common stock dividend. Dec 31 Made the second interest payment on the bond using the effective interest method. Dec 31 Closed the income summary account which had a credit balance of $153,000 to Retained Earnings.
Requirement 2 (50%) Record the following transactions in the General Journal: Jan 1 When the market rate was 12%, Winnifred Corp. issued $2,000,000, 14%, 5-year bonds. Interest is payable semiannually on June 30 and December 31. The corporation uses the effective interest method of amortizing bond premium or discount. (It would be a good idea to construct a bond amortization schedule) Issued 20,000 Common Shares for 50,000 cash. Jan 1 Mar 5 Mar 10 Mar 15 Declared cash dividends in the amount of $50,000 to be distributed to the shareholders of record on March 9 Dividends will be paid on March 15. Declared a 1 for 2 stock split on Common Shares outstanding. Paid the cash dividend declared on Mar 5. Jun 30 July 20 Repurchased 10,000 common shares, the market price was $5 per share. Made the first interest payment on the bond. The company uses the effective interest method. July 31 Sept 30 Jun 30 Made the first interest payment on the bond. The company uses the effective interest method. July 20 Repurchased 10,000 common shares, the market price was $5 per share. Issued 10,000 Preferred shares for 180,000 cash. Declared a 10% common stock dividend to shareholders of record on Oct 15. Market price at the time was $6 per share. Shares will be distributed Nov 25. Nov 25 Distributed the common stock dividend. Dec 31 Made the second interest payment on the bond using the effective interest method. Dec 31 Closed the income summary account which had a credit balance of $153,000 to Retained Earnings.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Requirement 2 (50%)
Record the following transactions in the General Journal:
When the market rate was 12%, Winnifred Corp. issued $2,000,000, 14%, 5-year bonds. Interest is payable
semiannually on June 30 and December 31. The corporation uses the effective interest method of amortizing
bond premium or discount. (It would be a good idea to construct a bond amortization schedule)
Issued 20,000 Common Shares for 50,000 cash.
Declared cash dividends in the amount of $50,000 to be distributed to the shareholders of record on March 9.
Dividends will be paid on March 15.
Declared a 1 for 2 stock split on Common Shares outstanding.
Paid the cash dividend declared on Mar 5.
Made the first interest payment on the bond. The company uses the effective interest method.
Repurchased 10,000 common shares, the market price was $5 per share.
Jan 1
Jan 1
Mar 5
Mar 10
Mar 15
Jun 30
July 20
Jun 30 Made the first interest payment on the bond. The company uses the effective interest method.
July 20 Repurchased 10,000 common shares, the market price was $5 per share.
July 31 Issued 10,000 Preferred shares for 180,000 cash.
Sept 30
Declared a 10% common stock dividend to shareholders of record on Oct 15. Market price at the time was $6
per share. Shares will be distributed Nov 25.
Distributed the common stock dividend.
Nov 25
Dec 31
Dec 31
Made the second interest payment on the bond using the effective interest method.
Closed the income summary account which had a credit balance of $153,000 to Retained Earnings.
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