Question

On January 1, Guillen Corporation had 95,500 shares of no-par common stock issued and outstanding. The stock has a stated value of $7 per share. During the year, the following occurred.
Apr. 1 Issued 26,000 additional shares of common stock for $17 per share.
June 15 Declared a cash dividend of $1 per share to stockholders of record on June 30.
July 10 Paid the $1 cash dividend.
Dec. 1 Issued 2,500 additional shares of common stock for $20 per share.
15 Declared a cash dividend on outstanding shares of $2.10 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 amount is entered. Do not indent manually.)

Answer 1

Answer and Explanation:

The journal entries are shown below:

On Apr 1

Cash $442,000 (26,000 shares × $17)

     To Common Stock  $182,000 (26,000 shares × $77)

     To Paid-in Capital Excess of stated Value-Common Stock $260,000

(26,000 shares × $10)  

(Being the issuance of the additional shares of common stock is recorded)

On Jun 15

Cash dividends $121,500  (95,500 shares + 26,000 shares) × $1

  To    Cash dividends payable  $121,500

(Being the dividend declared is recorded)

On Jul 10

Cash dividends payable $121,500 (95,500 shares + 26,000 shares) × $1

     To  Cash  $121,500

(Being the cash dividend paid is recorded)

On Dec 1

Cash $50,000 (2,500 shares × $20)

     To Common Stock  $17,500 (2,500 shares × $7)

     To Paid-in Capital Excess of stated Value-Common Stock $32,500 (2,500 shares × $13)

(Being the issuance of the additional shares of common stock is recorded

On Dec 15

Cash dividends $260,400  (95,500 shares + 26,000 shares + 2,500 shares) × $2.10

         To Cash dividends payable $260,400

(Being the dividend declared is recorded)