Selected transactions completed by Equinox Products Inc. during the fiscal year ended December 31, 20Y5, were as follows: Record on journal page 10: Jan. 3 Issued 15,000 shares of $20 par common stock at $30, receiving cash. Feb. 15 Issued 4,000 shares of $80 par preferred $1 stock at $100, receiving cash. May 1 Issued $500,000 of 10-year, 5% bonds at 104, with interest payable semiannually. 16 Declared a quarterly dividend of $0.50 per share on common stock and $1.00 per share on preferred stock. On the date of record, 100,000 shares of common stock were outstanding, no treasury shares were held and 20,000 shares of preferred stock were outstanding. Journalize this transaction as two separate entries. 26 Paid the cash dividends declared on May 16. Jun. 1 Purchased 4% bonds issued by Solstice Corp. as an available-for-sale investment for $300,150. 8 Purchased 8,000 shares of treasury common stock at $33 per share. 22 Purchased 40,000 shares of Pinkberry Co.’s common stock directly from the founders for $24 per share. Pinkberry has 125,000 shares issued and outstanding. 30 Declared a $1.00 quarterly cash dividend per share on preferred stock. On the date of record, 20,000 shares of preferred stock had been issued. Jul. 11 Paid the cash dividends to the preferred stockholders. Aug. 27 Received $27,500 dividend from Pinkberry Co. investment in Jun. 22. Record on journal page 11: Oct. 1 Purchased $90,000 of Dream Inc. 10-year, 5% bonds, directly from the issuing company, at their face amount plus accrued interest of $375. The bonds are a held-to-maturity investment. 7 Sold, at $38 per share, 2,600 shares of treasury common stock purchased on Jun. 8. 14 Received interest of $6,000 from the Solstice Corp. investment on Jun. 1. 29 Sold Solstice Corp. bonds with a face value of $40,020 for $45,000, realizing a gain of $4,980. 31 Recorded the payment of semiannual interest on the bonds issued on May 1 and the amortization of the premium for 6 months. The amortization is determined using the straight-line method. Dec. 31 Accrued interest for 3 months on the Dream Inc. bonds purchased on Oct. 1. 31 Pinkberry Co. reported total earnings of $240,000. Equinox Products recorded its share of Pinkberry Co. net income using the equity method. 31 The Solstice Corp. bonds have a fair value of $253,630 on December 31, 20Y5. Valuation Allowance for Available-for-Sale Investments had a balance of zero on January 1, 20Y5. Required: 1. Journalize the selected transactions. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. CHART OF ACCOUNTS Equinox Products Inc. General Ledger ASSETS 110 Cash 121 Accounts Receivable 122 Allowance for Doubtful Accounts 131 Merchandise Inventory 132 Interest Receivable 133 Prepaid Expenses 141 Available-for-Sale Investments-Solstice Corp. Bonds 142 Investment in Pinkberry Co. Stock 143 Investments-Dream Inc. Bonds 144 Valuation Allowance for Available-for-Sale Investments 181 Store Buildings and Equipment 182 Accumulated Depreciation-Store Buildings and Equipment 183 Office Buildings and Equipment 184 Accumulated Depreciation-Office Buildings and Equipment 191 Goodwill LIABILITIES 211 Accounts Payable 221 Income Tax Payable 225 Cash Dividends Payable 251 Bonds Payable 252 Discount on Bonds Payable 253 Premium on Bonds Payable EQUITY 311 Preferred Stock 312 Paid-in Capital in Excess of Par-Preferred Stock 321 Common Stock 322 Paid-in Capital in Excess of Par-Common Stock 331 Retained Earnings 341 Cash Dividends 351 Treasury Stock 352 Paid-in Capital from Sale of Treasury Stock 361 Unrealized Gain on Available-for-Sale Investments 362 Unrealized Loss on Available-for-Sale Investments REVENUE 410 Sales 611 Dividend Revenue 621 Interest Revenue 631 Income of Pinkberry Co. investment 641 Gain on Sale of Investment EXPENSES 511 Cost of Merchandise Sold 512 Bad Debt Expense 520 Sales Salaries Expense 521 Sales Commissions 522 Office Salaries Expense 531 Advertising Expense 532 Delivery Expense 537 Store Supplies Expense 538 Office Supplies Expense 539 Office Rent Expense 541 Income Tax Expense 551 Depreciation Expense-Store Buildings and Equipment 552 Depreciation Expense-Office Buildings and Equipment 591 Miscellaneous Selling Expense 592 Miscellaneous Administrative Expense 710 Interest Expense 731 Loss on Sale of Investment
Selected transactions completed by Equinox Products Inc. during the fiscal year ended December 31, 20Y5, were as follows: Record on journal page 10: Jan. 3 Issued 15,000 shares of $20 par common stock at $30, receiving cash. Feb. 15 Issued 4,000 shares of $80 par preferred $1 stock at $100, receiving cash. May 1 Issued $500,000 of 10-year, 5% bonds at 104, with interest payable semiannually. 16 Declared a quarterly dividend of $0.50 per share on common stock and $1.00 per share on preferred stock. On the date of record, 100,000 shares of common stock were outstanding, no treasury shares were held and 20,000 shares of preferred stock were outstanding. Journalize this transaction as two separate entries. 26 Paid the cash dividends declared on May 16. Jun. 1 Purchased 4% bonds issued by Solstice Corp. as an available-for-sale investment for $300,150. 8 Purchased 8,000 shares of treasury common stock at $33 per share. 22 Purchased 40,000 shares of Pinkberry Co.’s common stock directly from the founders for $24 per share. Pinkberry has 125,000 shares issued and outstanding. 30 Declared a $1.00 quarterly cash dividend per share on preferred stock. On the date of record, 20,000 shares of preferred stock had been issued. Jul. 11 Paid the cash dividends to the preferred stockholders. Aug. 27 Received $27,500 dividend from Pinkberry Co. investment in Jun. 22. Record on journal page 11: Oct. 1 Purchased $90,000 of Dream Inc. 10-year, 5% bonds, directly from the issuing company, at their face amount plus accrued interest of $375. The bonds are a held-to-maturity investment. 7 Sold, at $38 per share, 2,600 shares of treasury common stock purchased on Jun. 8. 14 Received interest of $6,000 from the Solstice Corp. investment on Jun. 1. 29 Sold Solstice Corp. bonds with a face value of $40,020 for $45,000, realizing a gain of $4,980. 31 Recorded the payment of semiannual interest on the bonds issued on May 1 and the amortization of the premium for 6 months. The amortization is determined using the straight-line method. Dec. 31 Accrued interest for 3 months on the Dream Inc. bonds purchased on Oct. 1. 31 Pinkberry Co. reported total earnings of $240,000. Equinox Products recorded its share of Pinkberry Co. net income using the equity method. 31 The Solstice Corp. bonds have a fair value of $253,630 on December 31, 20Y5. Valuation Allowance for Available-for-Sale Investments had a balance of zero on January 1, 20Y5. Required: 1. Journalize the selected transactions. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. CHART OF ACCOUNTS Equinox Products Inc. General Ledger ASSETS 110 Cash 121 Accounts Receivable 122 Allowance for Doubtful Accounts 131 Merchandise Inventory 132 Interest Receivable 133 Prepaid Expenses 141 Available-for-Sale Investments-Solstice Corp. Bonds 142 Investment in Pinkberry Co. Stock 143 Investments-Dream Inc. Bonds 144 Valuation Allowance for Available-for-Sale Investments 181 Store Buildings and Equipment 182 Accumulated Depreciation-Store Buildings and Equipment 183 Office Buildings and Equipment 184 Accumulated Depreciation-Office Buildings and Equipment 191 Goodwill LIABILITIES 211 Accounts Payable 221 Income Tax Payable 225 Cash Dividends Payable 251 Bonds Payable 252 Discount on Bonds Payable 253 Premium on Bonds Payable EQUITY 311 Preferred Stock 312 Paid-in Capital in Excess of Par-Preferred Stock 321 Common Stock 322 Paid-in Capital in Excess of Par-Common Stock 331 Retained Earnings 341 Cash Dividends 351 Treasury Stock 352 Paid-in Capital from Sale of Treasury Stock 361 Unrealized Gain on Available-for-Sale Investments 362 Unrealized Loss on Available-for-Sale Investments REVENUE 410 Sales 611 Dividend Revenue 621 Interest Revenue 631 Income of Pinkberry Co. investment 641 Gain on Sale of Investment EXPENSES 511 Cost of Merchandise Sold 512 Bad Debt Expense 520 Sales Salaries Expense 521 Sales Commissions 522 Office Salaries Expense 531 Advertising Expense 532 Delivery Expense 537 Store Supplies Expense 538 Office Supplies Expense 539 Office Rent Expense 541 Income Tax Expense 551 Depreciation Expense-Store Buildings and Equipment 552 Depreciation Expense-Office Buildings and Equipment 591 Miscellaneous Selling Expense 592 Miscellaneous Administrative Expense 710 Interest Expense 731 Loss on Sale of Investment
College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)
22nd Edition
ISBN:9781305666160
Author:James A. Heintz, Robert W. Parry
Publisher:James A. Heintz, Robert W. Parry
Chapter20: Corporations: Organization And Capital Stock
Section: Chapter Questions
Problem 1MP: Stockholders equity accounts and other related accounts of Gonzales Company as of January 1, 20--,...
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Question
Selected transactions completed by Equinox Products Inc. during the fiscal year ended December 31, 20Y5, were as follows:
Record on journal page 10:
Jan. | 3 | Issued 15,000 shares of $20 par common stock at $30, receiving cash. |
Feb. | 15 | Issued 4,000 shares of $80 par preferred $1 stock at $100, receiving cash. |
May | 1 | Issued $500,000 of 10-year, 5% bonds at 104, with interest payable semiannually. |
16 | Declared a quarterly dividend of $0.50 per share on common stock and $1.00 per share on |
|
26 | Paid the cash dividends declared on May 16. | |
Jun. | 1 | Purchased 4% bonds issued by Solstice Corp. as an available-for-sale investment for $300,150. |
8 | Purchased 8,000 shares of treasury common stock at $33 per share. | |
22 | Purchased 40,000 shares of Pinkberry Co.’s common stock directly from the founders for $24 per share. Pinkberry has 125,000 shares issued and outstanding. | |
30 | Declared a $1.00 quarterly cash dividend per share on preferred stock. On the date of record, 20,000 shares of preferred stock had been issued. | |
Jul. | 11 | Paid the cash dividends to the preferred stockholders. |
Aug. | 27 | Received $27,500 dividend from Pinkberry Co. investment in Jun. 22. |
Record on journal page 11:
Oct. | 1 | Purchased $90,000 of Dream Inc. 10-year, 5% bonds, directly from the issuing company, at their face amount plus accrued interest of $375. The bonds are a held-to-maturity investment. |
7 | Sold, at $38 per share, 2,600 shares of treasury common stock purchased on Jun. 8. | |
14 | Received interest of $6,000 from the Solstice Corp. investment on Jun. 1. | |
29 | Sold Solstice Corp. bonds with a face value of $40,020 for $45,000, realizing a gain of $4,980. | |
31 | Recorded the payment of semiannual interest on the bonds issued on May 1 and the amortization of the premium for 6 months. The amortization is determined using the straight-line method. | |
Dec. | 31 | Accrued interest for 3 months on the Dream Inc. bonds purchased on Oct. 1. |
31 | Pinkberry Co. reported total earnings of $240,000. Equinox Products recorded its share of Pinkberry Co. net income using the equity method. | |
31 | The Solstice Corp. bonds have a fair value of $253,630 on December 31, 20Y5. Valuation Allowance for Available-for-Sale Investments had a balance of zero on January 1, 20Y5. |
Required: | |
1. | Journalize the selected transactions. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. |
CHART OF ACCOUNTS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equinox Products Inc. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
General Ledger | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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