70.2K

Verified Solution

Link Copied!

post your journal entries to the T-Accounts

Dinah Soars, Biff Wellington and Duane Pipe are the stockholders of Sharpe Incorporated. The charter of the corporation authorized 500,000 shares of $2 par common stock, and 100,000 shares of $30 par, 4%, preferred stock. As of January 1, 2020, there were 24,000 shares of common stock issued and outstanding and 5,000 shares of preferred stock issued and outstanding. Selected transactions completed by Sharpe Incorporated during the fiscal year- ending December 31, 2020, are as follows: 1 Issued 12,500 shares of $2 par common stock at $22, receiving cash. Jan 1 Issued 5,800 shares of $30 par, 4%, preferred stock at $70 for cash. Jan 1 Purchased equipment for $195,000, paying $15,000 cash and financing the remainder with a 180-day, 6% note payable. Feb Mar 15 Purchased land for $352,000 by issuing 20,000 shares of common stock. Mar 31 Purchased a two-year insurance policy for $36,600. May 1 Purchased 1,750 shares of the company's own common stock at $22 per share. May 31 Issued $1,000,000 of 8-year, 7% bonds with interest payable semiannually. The amount of cash received was $926,896. July 30 Paid the amount due on the note payable signed on February 1. Aug 1 Sold 430 shares of treasury common stock purchased on May 1 for $25 per share. Sept 15 Declared a 2% stock dividend on common stock to be distributed on September 30 to stockholders of record on September 20. The market price per share on September 15 is $25 per share. Sept 30 Distributed the stock dividend declared September 15. 1 Borrowed $40,000 from Second Bank by issuing an 7% note. The note is to be repaid in quarterly payments of principal plus interest totaling $1,860 per quarter. Oct Oct 16 Sold 370 shares of treasury common stock purchased on May 1 for $18 per share

Answer & Explanation Solved by verified expert

See Answer