Question
Monsoon Company carried out the following transactions related to its common and preferred shares. Year 1 January 1: Issued 8,000 common shares for $20 each.
Monsoon Company carried out the following transactions related to its common and preferred shares.
Year 1
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January 1: Issued 8,000 common shares for $20 each.
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January 1: Issued 2,000 cumulative preferred shares for $30 each. The preferred shares pay a yearly dividend of $1.00 per share.
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February 7: Issued 2,000 common shares for a small parcel of land. The land has an appraised value of $42,000.
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November 30: Declared a dividend of $4,000 to be paid December 31.
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December 31: Paid the dividend declared on November 30.
Year 2:
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January 1: Issued 3,000 cumulative preferred shares for $80 each. They pay a yearly dividend of $1.50 per year.
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March 30: Issued 20,000 common shares for $22 each
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No dividends were declared during Year 2.
Year 3
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November 30: Declared a dividend of $15,000 to be paid December 31.
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December 31: Paid the dividend declared on November 30.
Year 4
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September 30: Declared a 10% common stock dividend to be distributed on October 31. On that date, the common shares were trading for $20.
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October 31: Distributed the common stock dividend.
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November 10: Reacquired 1,000 common shares for $19 each.
Instructions:
Prepare all the required journal entries for the above transactions.
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