Sunland Corporation showed the following information on its financial statements on December 31, 2024: Preferred Shares, no par value, $5 cumulative, 430,000 shares authorized, 190,000 shares issued and outstanding Common Shares, no par value, unlimited shares authorized, 430,000 shares issued and outstanding (a) The following transactions occurred, in the order given, during 2025: April 15: Received subscriptions and down payments for 100,000 common shares at $33 per share. The subscription contracts call for 50% of the subscription price to be paid upon receipt, and the remaining 50% to be paid on June 30. In the event of default on the subscriptions, the company will retain the down payment. (b) (d) (e) $19,000,000 (0) $10,750,000 May 1: Issued 140,000 preferred shares at $125 per share. June 30: Received payment for 70,000 of the subscribed common shares; the remaining 30,000 defaulted. Issued the share certificates for the appropriate number of shares. August 5: Repurchased and cancelled 30,000 common shares at a cost of $18 per share. September 15: Declared dividends for preferred shares (dividends had not been paid the previous year). Also declared $2.30 per share dividend for common shares. Both dividends are to be paid on November 1 to shareholders of record on October 1. If the preferred shares had a $100 par value, what would be the journal entry for the May 1 issuance of preferred shares in part (b)?
Sunland Corporation showed the following information on its financial statements on December 31, 2024: Preferred Shares, no par value, $5 cumulative, 430,000 shares authorized, 190,000 shares issued and outstanding Common Shares, no par value, unlimited shares authorized, 430,000 shares issued and outstanding (a) The following transactions occurred, in the order given, during 2025: April 15: Received subscriptions and down payments for 100,000 common shares at $33 per share. The subscription contracts call for 50% of the subscription price to be paid upon receipt, and the remaining 50% to be paid on June 30. In the event of default on the subscriptions, the company will retain the down payment. (b) (d) (e) $19,000,000 (0) $10,750,000 May 1: Issued 140,000 preferred shares at $125 per share. June 30: Received payment for 70,000 of the subscribed common shares; the remaining 30,000 defaulted. Issued the share certificates for the appropriate number of shares. August 5: Repurchased and cancelled 30,000 common shares at a cost of $18 per share. September 15: Declared dividends for preferred shares (dividends had not been paid the previous year). Also declared $2.30 per share dividend for common shares. Both dividends are to be paid on November 1 to shareholders of record on October 1. If the preferred shares had a $100 par value, what would be the journal entry for the May 1 issuance of preferred shares in part (b)?
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter10: Stockholder's Equity
Section: Chapter Questions
Problem 57E: Outstanding Stock Lars Corporation shows the following information in the stockholders equity...
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Transcribed Image Text:Sunland Corporation showed the following information on its financial statements on December 31, 2024:
Preferred Shares, no par value, $5 cumulative, 430,000 shares authorized,
190,000 shares issued and outstanding
Common Shares, no par value, unlimited shares authorized,
430,000 shares issued and outstanding
(a)
The following transactions occurred, in the order given, during 2025:
April 15: Received subscriptions and down payments for 100,000 common shares at $33 per share. The subscription
contracts call for 50% of the subscription price to be paid upon receipt, and the remaining 50% to be paid on June 30. In the
event of default on the subscriptions, the company will retain the down payment.
May 1: Issued 140,000 preferred shares at $125 per share.
June 30: Received payment for 70,000 of the subscribed common shares; the remaining 30,000 defaulted. Issued the share
certificates for the appropriate number of shares.
August 5: Repurchased and cancelled 30,000 common shares at a cost of $18 per share.
September 15: Declared dividends for preferred shares (dividends had not been paid the previous year). Also declared $2.30
per share dividend for common shares. Both dividends are to be paid on November 1 to shareholders of record on October 1.
(b)
(c)
(d)
(e)
$19,000,000
(f)
$10,750,000
If the preferred shares had a $100 par value, what would be the journal entry for the May 1 issuance of preferred shares in
part (b)?
Transcribed Image Text:Prepare the journal entries to record the above transactions for Sunland Corporation for 2025. (List all debit entries before credit entries.
Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry"
for the account titles and enter O for the amounts. Round average share price to 2 decimal places for intermediate calculations, e.g. 52.75 and
final answers to O decimal places, e.g. 5,275.)
No. Account Titles and Explanation
(a)
Share Subscriptions Receivable
(b)
Common Shares Subscribed
(To record sale of shares on a subscription basis)
Cash
Share Subscriptions Receivable
(To record collection of down payment)
Cash
Preferred Shares
Debit
3,300,000
1,650,000
17,500,000
Credit
3,300,000
1,650,000
17,500,000
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