Altuve Co. was incorporated on January 1, 2019, at which time 400,000 shares of $10 par value common stock were authorized, and 170,000 of these shares were issued for $13 per share. Net income for the year ended December 31, 2019, was $1,943,100. Altuve Co.s board of directors declared dividends of $3 per share of common stock on December 31, 2019, payable on February 7, 2020.

Required:

1. Use the horizontal model to show the effects of the issuance of common stock on January 1, 2019. Indicate the financial statement effect.
2. Use the horizontal model to show the effects of the declaration of dividends on December 31, 2019. Indicate the financial statement effect.
3. Use the horizontal model to show the effects of the payment of dividends on February 7, 2020. Indicate the financial statement effect.
4. Record the journal entry for the following transactions:

A.

Use the horizontal model to show the effects of the issuance of common stock on January 1, 2019. Indicate the financial statement effect. (Enter decreases with a minus sign to indicate a negative financial statement effect.)

Balance Sheet

Income Statement

Assets

=

Liabilities

+

Stockholders Equity

Net Income

=

Revenues

Expenses

=

+

=

=

+

=

B.

Use the horizontal model to show the effects of the declaration of dividends on December 31, 2019. Indicate the financial statement effect. (Enter decreases with a minus sign to indicate a negative financial statement effect.)

Balance Sheet

Income Statement

Assets

=

Liabilities

+

Stockholders Equity

Net Income

=

Revenues

Expenses

=

+

=

C.

Use the horizontal model to show the effects of the payment of dividends on February 7, 2020. Indicate the financial statement effect. (Enter decreases with a minus sign to indicate a negative financial statement effect.)

Balance Sheet

Income Statement

Assets

=

Liabilities

+

Stockholders Equity

Net Income

=

Revenues

Expenses

=

+

=

D.

• The issuance of common stock on January 1, 2019.

Note: Enter debits before credits.

Date	General Journal	Debit	Credit
January 01, 2019

• The declaration of dividends on December 31, 2019.

Note: Enter debits before credits.

Date	General Journal	Debit	Credit
December 31, 2019

• The payment of dividends on February 7, 2020.

Note: Enter debits before credits.

Date	General Journal	Debit	Credit
February 07, 2020