The owners are desirous of comparing serval financial transactions and possible outcomes to assist in guiding their decision-making process. They assume that the company will be formed on January 1, 2020. In addition, E&B Comic Bookstore Company’s charter will authorize 1,200,000 shares of common stock (to be divided into two classes (700,000 shares class A -voting rights and 500,000 shares class B -nonvoting rights) and 400,000, $X par value (see info below), 5% cumulative preferred stock. Issued 20% of authorised shares of class A common stock. Stock has par value of $30.00 per share and was issued at $40.00 per share. Issued 20% of authorised shares of no-par class B stock at $38.00. Issued 40% of authorised shares of preferred stock at par value $110.00. Exchanged 50% of authorised shares of class A common stock for Office Furniture and Equipment with an appraised value of $ 4,000,000.00 and Motor Truck with an appraised value of $10,000,000.00. Earned Net income 1,800,000.00. Declared interim dividends for preferred shareholders as well as $.80 per share to common stockholders. Requirement: Prepare the journal entries with narrations to record the following: The issuances of stock, close out net income to retained earnings, dividend declared and close out dividend to retained earnings.
The owners are desirous of comparing serval financial transactions and possible outcomes to assist in guiding their decision-making process. They assume that the company will be formed on January 1, 2020.
In addition, E&B Comic Bookstore Company’s charter will authorize 1,200,000 shares of common stock (to be divided into two classes (700,000 shares class A -voting rights and 500,000 shares class B -nonvoting rights) and 400,000, $X par value (see info below), 5% cumulative
Issued 20% of authorised shares of class A common stock. Stock has par value of $30.00 per share and was issued at $40.00 per share.
Issued 20% of authorised shares of no-par class B stock at $38.00.
Issued 40% of authorised shares of preferred stock at par value $110.00.
Exchanged 50% of authorised shares of class A common stock for Office Furniture and Equipment with an appraised value of $ 4,000,000.00 and Motor Truck with an appraised value of $10,000,000.00.
Earned Net income 1,800,000.00.
Declared interim dividends for preferred shareholders as well as $.80 per share to common stockholders.
Requirement:
Prepare the
The issuances of stock, close out net income to
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