The company's charter authorizes 1,000,000 shares of common stock and 100,000 shares of preferred stock and the following are the transactions for consideration. i) KY Jewelers purchased a piece of land from the original owner. In payment for the land, KY Jewelers issues 390,000 shares of common stock with $1.00 par value. The land has been appraised at a market value of $1,520,000. ii) The company sold 140,000 shares of common stock with $1 par value. iii) Issued 26,000 shares of $22 par value preferred stock. Shares were issued at par. iv) Earned net income of $950,000 v) Dividend declared and paid-$0.15 per share on common stock. vi) Dividend declared and paid-$5 per share on preferred stock. Required: a) Prepare the Journal entries and closing entries for the above transaction b) Prepare the owner’s equity section of the balance sheet based on the info above.

Principles of Accounting Volume 1
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ISBN:9781947172685
Author:OpenStax
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Chapter14: Corporation Accounting
Section: Chapter Questions
Problem 8PB: Tent Tarp Corporation is a manufacturer of outdoor camping equipment. The company was incorporated...
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The company's charter authorizes 1,000,000 shares of common stock and 100,000 shares of preferred stock and the following are the transactions for consideration.

i) KY Jewelers purchased a piece of land from the original owner. In payment for the land, KY Jewelers issues 390,000 shares of common stock with $1.00 par value. The land has been appraised at a market value of $1,520,000.

ii) The company sold 140,000 shares of common stock with $1 par value.

iii) Issued 26,000 shares of $22 par value preferred stock. Shares were issued at par.

iv) Earned net income of $950,000

v) Dividend declared and paid-$0.15 per share on common stock.

vi) Dividend declared and paid-$5 per share on preferred stock.

Required:

a) Prepare the Journal entries and closing entries for the above transaction

b) Prepare the owner’s equity section of the balance sheet based on the info above.

 

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