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Hi, can someone please help me with this question? Thank you! Comprehensive Problem 4 Part 1: Selected transactions completed by Equinox Products Inc. during the
Hi, can someone please help me with this question? Thank you!
Comprehensive Problem 4 Part 1: Selected transactions completed by Equinox Products Inc. during the fiscal year ended December 31, Year 1, were as follows: 1. Journalize the selected transactions. If no entry is required, select "No entry required" from the dropdown. For a compound transaction, if an amount box does not require an entry, leave it blank. a. Issued 15,000 shares of $20 par common stock at $30, receiving cash. Description Debit Credit b. Issued 4,000 shares of $80 par preferred 5% stock at $100, receiving cash. Description Debit Credit C. Issued $500,000 of 10-year, 5% bonds at 104, with interest payable semiannually. Description Debit Credit d. Declared a quarterly dividend of $0.50 per share on common stock and $1.00 per share on preferred stock. On the date of record, 100,000 shares of common stock were outstanding, no treasury shares were held and 20,000 shares of preferred stock were outstanding. Description Debit Credit Common stock Preferred stock e. Paid the cash dividends declared in (d). Description Debit Credit f. Purchased 7,500 shares of Solstice Corp. at $40 per share plus a $150 brokerage commission. The investment is classified as an available-for-sale investment. Description Debit Credit g. Purchased 8,000 shares of treasury common stock at $33 per share. Description Debit Credit h. Purchased 40,000 shares of Pinkberry Co. stock directly from the founders $24 per share. Pinkberry has 125,000 shares issued and outstanding. Equinox Products Inc. treated the investment as an equity method investment. Description Debit Credit i. Declared a $1.00 quarterly cash dividend per share on preferred stock. On the date of record, 20,000 shares of preferred stock had been issued. Description Debit Credit j. Paid the cash dividends to the preferred stockholders. Description Debit Credit k. Received $27,500 dividend from Pinkberry Co. investment in (h). Description Debit Credit 1. Purchased $90,000 of Dream Inc. 10-year, 5% bonds, directly from the issuing company, at their face amount plus accrued interest of $375. The bonds are classified as a held-to-maturity long-term investment. Description Debit Credit m. Sold, at $38 per share, 2,600 shares of treasury common stock purchased in (9). Description Debit Credit n. Received a dividend of $0.60 per share from the Solstice Corp. investment in (f). Description Debit Credit o. Sold 1,000 shares of Solstice Corp. at $45, including commission. Description Debit Credit p. Recorded the payment of semiannual interest on the bonds issued in (c) and the amortization of the premium for six months. The amortization is determined using the straight-line method. Description Debit Credit 4. Accrued interest for three months on the Dream Inc. bonds purchased in (1). Description Debit Credit r. Pinkberry Co. recorded total earnings of $240,000. Equinox Products recorded equity earnings for its share of Pinkberry Co. net income. Description Debit Credit s. The fair value for Solstice Corp. stock was $39.02 per share on December 31, Year 1. The investment is adjusted to fair value, using a valuation allowance account. Assume that Valuation Allowance for Available-for-Sale Investments had a beginning balance of zero. Description Debit CreditStep by Step Solution
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