Question

Dominica Corporation is authorized to issue 1,000,000 shares of $1 par value common stock. During 2020, the company has the following stock transactions.

Jan. 15 Issued 400,000 shares of stock at $7 per share.
Sept. 5 Purchased 30,000 shares of common stock for the treasury at $9 per share.
Dec. 6 Declared a $0.50 per share dividend to stockholders of record on December
20, payable January 3, 2015.
Journalize the transactions for Patrick Corporation.

Answer 1

Jan. 15

DR Cash (400,000 * 7) $2,800,000

CR Common Stock (400,000 *1) $400,000

CR Paid - In Capital in excess of Par (2,800,000 - 400,000) $2,400,000

(To record issuance of common stock above par)

Sept. 5

DR Treasury Stock (30,000 * 9) $270,000

CR Cash $270,000

(To record repurchase of Common Stock)

Dec. 6

DR Dividends (0.5 * $1 * 370,000 shares) $185,000

CR Dividends Payable $185,000

(To record dividends issued)