Exercise 1518 December 31 20any renoted the following amount

*Exercise 15-18 December 31,. 20any renoted the following amounts in the stockholders\' equity section of its December 31, 2016, balance sheet. Preferred stock, 10%, $100 par (10,000 shares authorized, 2,000 shares issued) s200, Common stock, $5 par (100,000 shares authorized, 20,000 shares issued) Additional paid-in capital Retained earnings 100,000 125,000 450,000 $875,000 Total During 2017, Cleves took part in the following transactions concerning stockholders\' equity 1. Paid the annual 2016 $10 per share dividend on preferred stock and a $2 per share dividend on common stock. These dividends had been declared on December 31, 2016. 2. Purchased 1,700 shares of its own outstanding common stock for $40 per share. Cleves uses the cost method. 3. Reissued 700 treasury shares for land valued at $30,000. 4. Issued 500 shares of preferred stock at $105 per share. 5. Declared a 10% stock dividend on the outstanding common stock when the stock is selling for $45 per share. 6. Issued the stock dividend. 7. Declared the annual 2017 $10 per share dividend on preferred stock and the $2 per share dividend on common stock. These dividends are payable in 2018. Prepare journal entries to record the transactions described above. (Credit account titles are automatically indented when 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. No. Account Titles and Explanation Debit Credit 2. 3. 1/30/2018

Solution

Q.no Journal Dr/Cr Dr Cr 1 Provision for Dividend/Dividend A/c(2000*10+20000*2) Dr 60000 To Bank Cr 60000 2 Common Stock A/c(1700*5) Dr 8500 Retained Earnings(1700*35) Dr 59500 To Bank(1700*40) Cr 68000 3 Land A/c Dr 30000 To Common Stock Cr 30000 4 Bank A/c (500*105) Dr 52500 To Preferred Stock(500*100) Cr 50000 To Stock Premium/Retained Earnings Cr 2500 5 Retained Earnings A/c ((20000-1700+700)*45*10% Dr 85500 To Provision for Dividend Cr 85500 6 Provision for Dividend/Dividend A/c(2000*10+20000*2) Dr 85500 To Bank Cr 85500 7 Retained Earnings A/c ((20000-1700+700)*2+2500*10 Dr 63000 To Provision for Dividend Cr 63000