Zinnia Company:

Zinnia Company incorporated on January 1, 2017. The company had authorized 1,500,000 shares of common stock, with a par value of $5 per share. The company had the following transactions during 2017:

Jan. 15 Issued 50,000 shares of common stock for $8 per share.

Sept. 1 Repurchased 5,000 shares of their common stock for $7 per share.

Nov. 1 Declared a $.50 per share cash dividend to be paid on Dec. 30 to stockholders of record on Dec. 1.

Required:

1. Prepare the necessary journal entries to record the above transactions. (12 points)

2. Assume that Zinnia Company declared a 15% stock dividend on Nov. 1 instead of a cash dividend. If the stock was trading at $10 per share on Nov. 1, what journal entry would the company record on Nov. 1? (3 points)