Question
On January 1, 2019, Bartov Company issues 5,000 shares of $100 par value preferred stock at $250 cash per share. On March 1, the company
On January 1, 2019, Bartov Company issues 5,000 shares of $100 par value preferred stock at $250 cash per share. On March 1, the company repurchases 5,000 shares of previously issued $1 par value common stock at $83 cash per share.
a. Using the financial statement effects template, illustrate the effects of these two transactions.
Use negative signs with answers when appropriate. When applicable, enter total amount for contributed capital.
Balance Sheet | Income Statement | |||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Transaction | Cash Asset | + | Noncash Asset | = | Liabilities | + | Contrib. Capital | + | Earned Capital | - | Contra Equity | Revenues | - | Expenses | = | Net Income | ||
1/1/19: Issued preferred stock. | Answer | + | Answer | = | Answer | + | Answer | + | Answer | + | Answer | Answer | - | Answer | = | Answer | ||
3/1/19: Repurchase common stock. | Answer | + | Answer | = | Answer | + | Answer | + | Answer | + | Answer | Answer | - | Answer | = | Answer |
b. Prepare the journal entries for the two transactions.
General Journal | ||||
---|---|---|---|---|
Date | Description | Debit | Credit | |
1/1/19 | AnswerAdditional paid in capitalCashCommon stockTreasury stock | Answer | Answer | |
Preferred stock | Answer | Answer | ||
AnswerAdditional paid in capitalCashCommon stockTreasury stock | Answer | Answer | ||
3/1/19 | AnswerAdditional paid in capitalCashCommon stockTreasury stock | Answer | Answer | |
AnswerAdditional paid in capitalCashCommon stockTreasury stock | Answer | Answer |
c. Post the journal entries from b to the related T-accounts.
Cash | |||
---|---|---|---|
Answer | Answer |
Preferred Stock | |||
---|---|---|---|
Answer | Answer |
Treasury Stock | |||
---|---|---|---|
Answer | Answer |
Additional Paid in Capital | |||
---|---|---|---|
Answer | Answer |
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