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Selected transactions completed by Equinox Products Inc. during the fiscal year ended December 31, Year 1, were as follows: Issued 15,000 shares of $20 par
Selected transactions completed by Equinox Products Inc. during the fiscal year ended December 31, Year 1, were as follows:
- Issued 15,000 shares of $20 par common stock at $30, receiving cash.
- Issued 4,000 shares of $80 par preferred 5% stock at $100, receiving cash.
- Issued $500,000 of 10-year, 5% bonds at 104, with interest payable semiannually.
- 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.
- Paid the cash dividends declared in (d).
- 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.
- Purchased 8,000 shares of treasury common stock at $33 per share.
- Purchased 40,000 shares of Pinkberry Co. stock directly from the founders for $24 per share. Pinkberry has 125,000 shares issued and outstanding. Equinox Products Inc. treated the investment as an equity method investment.
- 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.
- Paid the cash dividends to the preferred stockholders.
- Received $27,500 dividend from Pinkberry Co. investment in (h).
- 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.
- Sold, at $38 per share, 2,600 shares of treasury common stock purchased in (g).
- Received a dividend of $0.60 per share from the Solstice Corp. investment in (f).
- Sold 1,000 shares of Solstice Corp. at $45, including commission.
- 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.
- Accrued interest for three months on the Dream Inc. bonds purchased in (l).
- Pinkberry Co. recorded total earnings of $240,000. Equinox Products recorded equity earnings for its share of Pinkberry Co. net income.
- 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.
Instructions:
- Journalize the selected transactions.
Please see attachment for the details of the other account balances:
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