Question

On January 1, Pharoah Corporation had 91,500 shares of no-par common stock issued and outstanding. The stock has a stated value of $4 per share. During the year, the following occurred. Apr. 1 Issued 23,000 additional shares of common stock for $19 per share. June 15 Declared a cash dividend of $2 per share to stockholders of record on June 30. July 10 Paid the $2 cash dividend. Dec. 1 Issued 2,000 additional shares of common stock for $18 per share. 15 Declared a cash dividend on outstanding shares of $3.00 per share to stockholders of record on December 31.

Prepare the entries to record these transactions. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Answer 1

Answer and Explanation:

The Journal entry is shown below:-

1. Cash dividend Dr, $229,000

(91,500 + 23,000) × $2

To Dividend payable $229,000

(Being dividend declared is recorded)

2. Dividend payable Dr, $229,000

To Cash $229,000

(Being the payment of dividend is recorded)

3. Cash dividend Dr, $349,500

(91,500 + 23,000 + 2,000) × $3.00

To Dividend payable $349,500

(Being the dividend declared is recorded)