BE15.1 (LO 1) Buttercup Corporation issued 300 shares of $10 par value common stock for $4,500.

Prepare Buttercup’s journal entry.

Cash 4,500

Common stock 3,000

Paid-in Capital in excess of Par-common stock 1,500

BE15.2 (LO 1) Swarten Corporation issued 600 shares of no-par common stock for $8,200. Prepare
Swarten’s journal entry if (a) the stock has no stated value, and (b) the stock has a stated value of $2
per share.

a) Cash 8,200
Common stock 8,200
b) Cash 8,200
Common stock 1,200
Paid-in Capital in excess of Stated value-common stock 6,000

BE15.3 (LO 1, 2) Wilco Corporation has the following account balances at December 31, 2020.

Common stock, $5 par value $ 510,000

Treasury stock 90,000

Retained earnings 2,340,000

Paid-in capital in excess of par—common stock 1,320,000

Prepare Wilco’s December 31, 2020, stockholders’ equity section.

Common stock 510,000

Paid-in Capital in excess of Par-common stock 1,320,000

Total paid-in capital 1,830,000

Retained earnings 2,340,000

4,170,000

Less: Treasury stock 90,000

Total stockholder equity 4,080,000

BE15.4 (LO 1) Ravonette Corporation issued 300 shares of $10 par value common stock and 100 shares
of $50 par value preferred stock for a lump sum of $13,500. The common stock has a market price of
$20 per share, and the preferred stock has a market price of $90 per share. Prepare the journal entry
to record the issuance.

Cash 13,500

Preferred stock 5,000

 Paid-in Capital in excess of Par-Prefered stock 3,100

Common stock 3,000

Paid-in Capital in excess of Par-common stock 2,400

BE15.5 (LO 1) On February 1, 2020, Buff alo Corporation issued 3,000 shares of its $5 par value
common stock for land worth $31,000. Prepare the February 1, 2020, journal entry.

Land 31,000

Common stock 15,000

Paid-in Capital in excess of Par-common stock 16,000

BE15.6 (LO 1) Moonwalker Corporation issued 2,000 shares of its $10 par value common stock for
$60,000. Moonwalker also incurred $1,500 of costs associated with issuing the stock. Prepare
Moonwalker’s journal entry to record the issuance of the company’s stock.

Cash 58,500 (60-1,5)

Common stock 20,000

Paid-in Capital in excess of Par-common stock 38,500

BE15.7 (LO 1) Hinges Corporation issued 500 shares of $100 par value preferred stock for $61,500.
Prepare Hinges’s journal entry.

Cash 61,500

Preferred stock 50,000

Paid-in Capital in excess of Par-preferred stock 11,500

BE15.8 (LO 2) Sprinkle Inc. has outstanding 10,000 shares of $10 par value common stock. On July 1,
2020, Sprinkle reacquired 100 shares at $87 per share. On September 1, Sprinkle reissued 60 shares at
$90 per share. On November 1, Sprinkle reissued 40 shares at $83 per share. Prepare Sprinkle’s
journal entries to record these transactions using the cost method.

1/7: Treasuary 8,700

Cash 8,700

1/9: Cash 5,400 (60x90)

Treasury stock 5,220 (60x87)

Paid-in Capital from treasury stock 180

1/11: Cash 3,320 (40x83)

Paid-in Capital from treasury stock 160

Treasury stock 3,480 (40x87)

BE15.10 (LO 3) Woolford Inc. declared a cash dividend of $1.00 per share on its 2 million outstanding
shares. The dividend was declared on August 1, payable on September 9 to all stockholders of record
on August 15. Prepare all journal entries necessary on those three dates.

1/8: Retained earnings 2,000,000

Dividends payable 2,000,000

9/9: Dividends payable 2,000,000

Cash 2,000,000

BE15.11 (LO 3) Cole Inc. owns shares of Marlin Corporation stock. At December 31, 2020, the
securities were carried in Cole’s accounting records at their cost of $875,000, which equals their fair
value. On September 21, 2021, when the fair value of the securities was $1,200,000, Cole declared a
property dividend whereby the Marlin securities are to be distributed on October 23, 2021, to
stockholders of record on October 8, 2021. Prepare all journal entries necessary on those three dates.

21/9: Equity investment 325,000

Unrealized holding gain or loss – income 325,000 (1,200,000 – 875,000)

Retained earnings 1,200,000

Property dividends payable 1,200,000

23/10: Property dividends payable 1,200,000

Equity investment 1,200,000

BE15.12 (LO 3) Graves Mining Company declared, on April 20, a dividend of $500,000 payable on June
1. Of this amount, $125,000 is a return of capital. Prepare the April 20 and June 1 entries for Graves.

20/4: Retained earnings 125,000

Paid-in Capital in excess of Par-common stock 375,000

Dividends payable 500,000

1/7: Dividends payable 500,000

Cash 500,000

BE15.13 (LO 3) Green Day Corporation has outstanding 400,000 shares of $10 par value common
stock. The corporation declares a 5% stock dividend when the fair value of the stock is $65 per share.
Prepare the journal entries for Green Day Corporation for both the date of declaration and the date of
distribution.

Date of declaration:

Retained earnings 1,300,000

Common Stock Dividend Distributable 200,000

 Paid-in Capital in Excess of Par—Common stock 1,100,00

Date of distribution:

Common Stock Dividend Distributable 200,000

Common Stock 200,000

BE15.14 (LO 3) Use the information from BE15.13, but assume Green Day Corporation declared a 100%
stock dividend rather than a 5% stock dividend. Prepare the journal entries for both the date of
declaration and the date of distribution.

Date of declaration:

Retained earnings 4,000,000

Common Stock Dividend Distributable 4,000,000

Date of distribution:

Common Stock Dividend Distributable 4,000,000

Common stocks 4,000,000

E15.2 (LO 1) (Recording the Issuance of Common and Preferred Stock) Kathleen Battle Corporation
was organized on January 1, 2020. It is authorized to issue 10,000 shares of 8%, $100 par value
preferred stock, and 500,000 shares of no-par common stock with a stated value of $1 per share. The
following stock transactions were completed during the first year.

Jan. 10 Issued 80,000 shares of common stock for cash at $5 per share.

Mar. 1 Issued 5,000 shares of preferred stock for cash at $108 per share.

Apr. 1 Issued 24,000 shares of common stock for land. The asking price of the land was $90,000; the
fair value of the land was $80,000.

May 1 Issued 80,000 shares of common stock for cash at $7 per share.

Aug. 1 Issued 10,000 shares of common stock to attorneys in payment of their bill of $50,000 for
services rendered in helping the company organize.

Sept. 1 Issued 10,000 shares of common stock for cash at $9 per share.

Nov. 1 Issued 1,000 shares of preferred stock for cash at $112 per share.

Prepare the journal entries to record the above transactions.

Jan. 10 Issued 80,000 shares of common stock for cash at $5 per share.

Dr Cash (80.000 x$5) 400,000

Cr Common Stock (80.000 x $1) 80,000
Cr Paid-in Capital in Excess of Stated Value - Common Stock ( 80.000 x $4) 320,000

Mar. 1 Issued 5,000 shares of preferred stock for cash at $108 per share.
Dr Cash 540,000

Cr Prefered stock 500,000

Cr Paid in Capital in excess of par 40,000

Apr. 1 Issued 24,000 shares of common stock for land. The asking price of the land was $90,000; the
fair value of the land was $80,000.

Land 80,000

Common Stock 24,000

Paid-in capital in excess of stated value – common stock 56,000

May 1 Issued 80,000 shares of common stock for cash at $7 per share.

Dr Cash 560,000

Cr Common stock 80,000

Cr Paid in capital in excess of par 480,000

Aug. 1 Issued 10,000 shares of common stock to attorneys in payment of their bill of $50,000 for
services rendered in helping the company organize.

Dr Organization exp 50,000

Cr Common stock 10,000

Cr Paid-in capital in excess of stated value – common stock 40,000

Sept. 1 Issued 10,000 shares of common stock for cash at $9 per share. Nov. 1 Issued 1,000 shares of
preferred stock for cash at $112 per share.

Dr cash 90,000

Cr Common stock 10,000

Cr Paid-in capital in excess of stated value – common stock 80,000

Nov. 1 Issued 1,000 shares of preferred stock for cash at $112 per share

Dr cash 112,000

Cr Prefered stock 100,000

Cr Paid-in capital in excess of stated value – Prefered stock 12,000

E15.6 (LO 1, 2) (Stock Issuances and Repurchase) Lindsey Hunter Corporation is authorized to issue
50,000 shares of $5 par value common stock. During 2020, Lindsey Hunter took part in the following
selected transactions.

1. Issued 5,000 shares of stock at $45 per share, less costs related to the issuance of the stock totaling
$7,000.

Cash 218,000 (5,000x45 – 7000)

Common stock 25,000 (5000x5)

Paid-in Capital in Excess of Par—Common stock 193,000

2. Issued 1,000 shares of stock for land appraised at $50,000. The stock was actively traded on a
national stock exchange at approximately $46 per share on the date of issuance.

Land 46,000 (1000x46)

Common stock 5,000 (1000x5)

Paid-in Capital in Excess of Par—Common stock 41,000

3. Purchased 500 shares of treasury stock at $43 per share. The treasury shares purchased were issued
in 2016 at $40 per share.

Treasury stock 21,500 (500x43)

Cash 21,500

Instructions

a. Prepare the journal entry to record item 1.

b. Prepare the journal entry to record item 2.

c. Prepare the journal entry to record item 3 using the cost method.

E15.14 (LO 3) (Entries for Stock Dividends and Stock Splits) The stockholders’ equity accounts of G.K.
Chesterton Company have the following balances on December 31, 2020.

Common stock, $10 par, 300,000 shares issued and outstanding $3,000,000

Paid-in capital in excess of par—common stock 1,200,000

Retained earnings 5,600,000

Shares of G.K. Chesterton Company stock are currently selling on the Midwest Stock Exchange at $37.

Instructions

Prepare the appropriate journal entries for each of the following cases.

a. A stock dividend of 5% is declared and issued.

Declaration date:
Retained earnings 555,000 (15,000x37)

Common Stock Dividend Distributable 150,000 (15,000x10)

Paid-in Capital in Excess of Par—Common 405,000

Issued date:

Common Stock Dividend Distributable 150,000

Common stock 150,000

b. A stock dividend of 100% is declared and issued.

Declaration date:

Retained earnings 3,000,000

Common Stock Dividend Distributable 3,000,000 (300,000 x 10)

Issued date:

Common Stock Dividend Distributable 3,000,000 (300,000 x 10)

Common stock 3,000,000

c. A 2-for-1 stock split is declared and issued.

No entry, the par value becomes $5 and the number of shares outstanding increases to 600,000