On January 1, Whispering Winds Corp. had 90,000 shares of no-par common stock issued and outstanding. The stock has a stated value of $5 per share. During the year, the following occurred. Apr. 1 Issued 28,500 additional shares of common stock for $16 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 1,000 additional shares of common stock for $20 per share. 15 Declared a cash dividend on outstanding shares of $4.20 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.)

Question

Business

Nigel Avila

15 June, 11:05

On January 1, Whispering Winds Corp. had 90,000 shares of no-par common stock issued and outstanding. The stock has a stated value of $5 per share. During the year, the following occurred. Apr. 1 Issued 28,500 additional shares of common stock for $16 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 1,000 additional shares of common stock for $20 per share. 15 Declared a cash dividend on outstanding shares of $4.20 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.)

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Answers (1)

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Giada Christian · Answer 1

Answer and Explanation:

The Journal entry is shown below:-

1. Cash Dr, $456,000

(28,500 * $16)

To additional paid in capital in excess of par $313,500

To common stock $142,500

(28,500 * $5)

(Being issuance of common stock is recorded)

2. Cash Dividend Dr, $118,500

(90,000 + 28,500) * $1

To Dividend payable $118,500

(Being cash dividend is recorded)

3. Dividend payable Dr,$118,500

To Cash $118,500

(Being cash paid is recorded)

4. Cash $20,000

(1,000 * $20)

To additional paid in capital in excess of par $15,000

To Common stock $5,000

(1,000 * $5)

(Being issuance of common stock is recorded)

5. Cash dividend $497,700

((90,000 + 28,500) * $4.20)

To Dividend payable $497,700

Being dividend declared is recorded)