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Prepare journal entries for the following situations.

-Mellor Corporation was formed on January 1, 2016. The corporatecharter authorized 200,000 shares of $5 par value common stock. OnJanuary 10th, the corporation issued 500 shares to its attorneys inpayment of a $9,500 charge for drawing up the articles ofincorporation. What is the journal entry to record thistransaction?

-On January 21st, Mellor Corporation sold 20,500 shares of its $5par value common stock at a cash price of $13 per share. What isthe journal entry to record this transaction?

-Moss Company issues bonds with a par value of $300,000 on July 1,2016. The bonds’ annual contract rate is 6%, and interest is paidsemiannually on June 30 and December 31. The bonds mature in threeyears. The annual market rate at the date of issuance is 10%. Mossuses the effective interest method for amortizing premiums anddiscounts. What is the journal entry to record the bond issuance onJuly 1, 2016?

-Moss Company issues bonds with a par value of $300,000 on July 1,2016. The bonds’ annual contract rate is 6%, and interest is paidsemiannually on June 30 and December 31. The bonds mature in threeyears. The annual market rate at the date of issuance is 10%. Mossuses the effective interest method for amortizing premiums anddiscounts. What is the journal entry to record the first interestpayment on December 31, 2016?


-Moss Company issues bonds with a par value of $300,000 on July 1,2016. The bonds’ annual contract rate is 6%, and interest is paidsemiannually on June 30 and December 31. The bonds mature in threeyears. The annual market rate at the date of issuance is 10%. Mossuses the effective interest method for amortizing premiums anddiscounts. What is the journal entry to record the second interestpayment on June 30, 2017?

-Snyder Corp. purchased equipment on May 1, 2016, for $90,000 incash. The company paid shipping of $15,000 and set up fees of$2,750. The estimated useful life of the equipment is 10 years andit is estimated that the salvage value will be $20,000. Snyder usesthe Straight Line method to record depreciation. Record theDecember 31st adjusting journal entry for depreciation for2016.

-Triumph Enterprises purchased equipment on January 1, 2016, for$200,000 in cash. The estimated useful life of the equipment is 10years and the estimated salvage value is $50,000. Triumph uses theDouble Declining Balance method to record depreciation. Record theDecember 31st adjusting journal entry for depreciation for2016.

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Deanna Hettinger
Deanna HettingerLv2
28 Sep 2019

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Moss Company issues bonds with a par value of $150,000 on July 1, 2016. The bonds’ annual contract rate is 8%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 6%. Moss uses the effective interest method for amortizing premiums and discounts. What is the journal entry to record the bond issuance on July 1, 2016?


Clothing Frontiers began operations on January 1 and engages in the following transactions during the year related to stockholders’ equity.

January 1 Issues 700 shares of common stock for $34 per share.

April 1 Issues 110 additional shares of common stock for $38 per share.

Record the transactions, assuming Clothing Frontiers has either $1 par value common stock or $1 stated value stock. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

1. Record the issuance of 700 shares of common stock for $34 per share.

2. Record the issuance of 110 additional shares of common stock for $38 per share.

Problem 18-12 Various shareholders' equity topics; comprehensive[LO18-1, 18-4, 18-5, 18-6, 18-7, 18-8]

Part A

In late 2015, the Nicklaus Corporation was formed. The corporatecharter authorizes the issuance of 5,000,000 shares of common stockcarrying a $1 par value, and 1,000,000 shares of $5 par value,noncumulative, nonparticipating preferred stock. On January 2,2016, 3,000,000 shares of the common stock are issued in exchangefor cash at an average price of $15 per share. Also on January 2,all 1,000,000 shares of preferred stock are issued at $30 pershare.

Required:
1.

Prepare journal entries to record these transactions.(If no entry is required for a particular transaction,select "No journal entry required" in the first accountfield.)

2.

Prepare the shareholders' equity section of the Nicklaus balancesheet as of March 31, 2016. (Assume net income for the firstquarter 2016 was $1,500,000.)

Part B
During 2016, the Nicklaus Corporation participatedin three treasury stock transactions:
a. On June 30, 2016, the corporation reacquires 190,000 shares forthe treasury at a price of $17 per share.
b. On July 31, 2016, 45,000 treasury shares are reissued at $20per share.
c. On September 30, 2016, 45,000 treasury shares are reissued at$15 per share.
Required:
1.

Prepare journal entries to record these transactions.(If no entry is required for a transaction/event, select"No journal entry required" in the first accountfield.)

2.

Prepare the Nicklaus Corporation shareholders' equity section asit would appear in a balance sheet prepared at September 30, 2016.(Assume net income for the second and third quarter was$2,950,000.)

Part C

On October 1, 2016, Nicklaus Corporation receives permission toreplace its $1 par value common stock (5,000,000 shares authorized,3,000,000 shares issued, and 2,900,000 shares outstanding) with anew common stock issue having a $.50 par value. Since the new parvalue is one-half the amount of the old, this represents a 2-for-1stock split. That is, the shareholders will receive two shares ofthe $.50 par stock in exchange for each share of the $1 par stockthey own. The $1 par stock will be collected and destroyed by theissuing corporation.

On November 1, 2016, the NicklausCorporation declares a $0.13 per share cash dividend on commonstock and a $0.30 per share cash dividend on preferred stock.Payment is scheduled for December 1, 2016, to shareholders ofrecord on November 15, 2016.

On December 2, 2016, the NicklausCorporation declares a 1% stock dividend payable on December 28,2016, to shareholders of record on December 14. At the date ofdeclaration, the common stock was selling in the open market at $15per share. The dividend will result in 58,000 (0.01 × 5,800,000)additional shares being issued to shareholders.

Required:

Prepare journal entries to record the declaration and payment ofthese stock and cash dividends. (If no entry is requiredfor a transaction/event, select "No journal entry required" in thefirst account field.)

1.Record the entry for a 2-for-1 stock split.

2.Record declaration of cash dividend for common shares andpreferred shares.

3.Record the entry on date of record.

4.Record payment of cash dividend for common shares andpreferred shares.

5.Record declaration of common stock dividend.

6.Record distribution of common stock dividend.

2.

Prepare the December 31, 2016, shareholders' equity section ofthe balance sheet for the Nicklaus Corporation. (Assume net incomefor the fourth quarter was $2,450,000.)

3.

Prepare a statement of shareholders' equity for NicklausCorporation for 2016. (Amounts to be deducted should beindicated with a minus sign. Enter your answers inthousands.)

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