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28 Sep 2019
Selected transactions completed by Equinox Products Inc. duringthe fiscal year ended December 31, 2016, were as follows:
Record on journal page 10:
Jan. 3 Issued 15,000 shares of $20 par common stock at $30, receivingcash. Feb. 15 Issued 4,000 shares of $80 par preferred 5% stock at $100,receiving cash. May 1 Issued $500,000 of 10-year, 5% bonds at 104, with interestpayable semiannually. 16 Declared a dividend of $0.50 per share on common stock and$1.00 per share on preferred stock. On the date of record, 100,000shares of common stock were outstanding, no treasury shares wereheld, and 20,000 shares of preferred stock were outstanding.Journalize this transaction as a single entry. 26 Paid the cash dividends declared on May 16. Jun. 1 Purchased 7,500 shares of Solstice Corp. at $40 per share, plusa $150 brokerage commission. The investment is classified as anavailable-for-sale investment. 8 Purchased 8,000 shares of treasury common stock at $33 pershare. 22 Purchased 40,000 shares of Pinkberry Co. stock directly fromthe founders for $24 per share. Pinkberry has 125,000 shares issuedand outstanding. Equinox Products Inc. treated the investment as anequity method investment. 30 Declared a $1.00 cash dividend per share on preferred stock. Onthe date of record, 20,000 shares of preferred stock wereoutstanding. Jul. 11 Paid the cash dividends declared on Jul. 11 to the preferredstockholders. Aug. 27 Received $27,500 dividend from Pinkberry Co. investment of Jun.22.
Record on journal page 11:
Oct. 1 Purchased $90,000 of Dream Inc. 10-year, 5% bonds, directlyfrom the issuing company, at their face amount plus accruedinterest of $375. The bonds are classified as a held-to-maturitylong-term investment. 7 Sold, at $38 per share, 2,600 shares of treasury common stockpurchased on Jun. 8. 14 Received a dividend of $0.60 per share from the Solstice Corp.investment on Jun. 1. 29 Sold 1,000 shares of Solstice Corp. at $45, includingcommission. 31 Recorded the payment of semiannual interest on the bonds issuedon May 1 and the amortization of the premium for six months. Theamortization is determined using the straight-line method. Dec. 31 Accrued interest for three months on the Dream Inc. bondspurchased on Oct. 1. 31 Pinkberry Co. recorded total earnings of $240,000. EquinoxProducts recorded equity earnings for its share of Pinkberry Co.net income. 31 The fair value for Solstice Corp. stock was $39.02 per share onDecember 31, 2016. The investment is adjusted to fair value, usinga valuation allowance account. Assume Valuation Allowance forAvailable-for-Sale Investments had a beginning balance of zero.
CHART OF ACCOUNTS Equinox Products Inc. General Ledger ASSETS 110 Cash 121 Accounts Receivable 122 Allowance for Doubtful Accounts 131 Merchandise Inventory 132 Interest Receivable 133 Prepaid Expenses 141 Investments-Solstice Corp. 142 Investment in Pinkberry Co. Stock 143 Investment in Dream Inc. Bonds 144 Valuation Allowance for Available-for-Sale Investments 181 Store Buildings and Equipment 182 Accumulated Depreciation-Store Buildings and Equipment 183 Office Buildings and Equipment 184 Accumulated Depreciation-Office Buildings and Equipment 191 Goodwill
LIABILITIES 211 Accounts Payable 221 Income Tax Payable 225 Cash Dividends Payable 251 Bonds Payable 252 Discount on Bonds Payable 253 Premium on Bonds Payable
EQUITY 311 Preferred Stock 312 Paid-in Capital in Excess of Par-Preferred Stock 321 Common Stock 322 Paid-in Capital in Excess of Par-Common Stock 331 Retained Earnings 341 Cash Dividends 351 Treasury Stock 352 Paid-in Capital from Sale of Treasury Stock 361 Unrealized Gain (Loss) on Available-for-Sale Investments
REVENUE 410 Sales 611 Dividend Revenue 621 Interest Revenue 631 Income from Pinkberry Co. 641 Gain on Sale of Investments
EXPENSES 511 Cost of Merchandise Sold 512 Bad Debt Expense 520 Sales Salaries Expense 521 Sales Commissions 522 Office Salaries Expense 531 Advertising Expense 532 Delivery Expense 537 Store Supplies Expense 538 Office Supplies Expense 539 Office Rent Expense 541 Income Tax Expense 551 Depreciation Expense-Store Equipment 552 Depreciation Expense-Office Equipment 591 Miscellaneous Selling Expense 592 Miscellaneous Administrative Expense 710 Interest Expense 731 Loss on Sale of Investments
1. Journalize the selected transactions. Refer to the Chart ofAccounts for exact wording of account titles. Scroll down forjournal page 11.
Journal 10
Date Description Post. Ref Debit Credit
Journal 11
Date Description Post. Ref Debit Credit
Selected transactions completed by Equinox Products Inc. duringthe fiscal year ended December 31, 2016, were as follows:
Record on journal page 10:
Jan. | 3 | Issued 15,000 shares of $20 par common stock at $30, receivingcash. |
Feb. | 15 | Issued 4,000 shares of $80 par preferred 5% stock at $100,receiving cash. |
May | 1 | Issued $500,000 of 10-year, 5% bonds at 104, with interestpayable semiannually. |
16 | Declared a dividend of $0.50 per share on common stock and$1.00 per share on preferred stock. On the date of record, 100,000shares of common stock were outstanding, no treasury shares wereheld, and 20,000 shares of preferred stock were outstanding.Journalize this transaction as a single entry. | |
26 | Paid the cash dividends declared on May 16. | |
Jun. | 1 | Purchased 7,500 shares of Solstice Corp. at $40 per share, plusa $150 brokerage commission. The investment is classified as anavailable-for-sale investment. |
8 | Purchased 8,000 shares of treasury common stock at $33 pershare. | |
22 | Purchased 40,000 shares of Pinkberry Co. stock directly fromthe founders for $24 per share. Pinkberry has 125,000 shares issuedand outstanding. Equinox Products Inc. treated the investment as anequity method investment. | |
30 | Declared a $1.00 cash dividend per share on preferred stock. Onthe date of record, 20,000 shares of preferred stock wereoutstanding. | |
Jul. | 11 | Paid the cash dividends declared on Jul. 11 to the preferredstockholders. |
Aug. | 27 | Received $27,500 dividend from Pinkberry Co. investment of Jun.22. |
Record on journal page 11:
Oct. | 1 | Purchased $90,000 of Dream Inc. 10-year, 5% bonds, directlyfrom the issuing company, at their face amount plus accruedinterest of $375. The bonds are classified as a held-to-maturitylong-term investment. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7 | Sold, at $38 per share, 2,600 shares of treasury common stockpurchased on Jun. 8. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
14 | Received a dividend of $0.60 per share from the Solstice Corp.investment on Jun. 1. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
29 | Sold 1,000 shares of Solstice Corp. at $45, includingcommission. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
31 | Recorded the payment of semiannual interest on the bonds issuedon May 1 and the amortization of the premium for six months. Theamortization is determined using the straight-line method. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dec. | 31 | Accrued interest for three months on the Dream Inc. bondspurchased on Oct. 1. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
31 | Pinkberry Co. recorded total earnings of $240,000. EquinoxProducts recorded equity earnings for its share of Pinkberry Co.net income. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
31 | The fair value for Solstice Corp. stock was $39.02 per share onDecember 31, 2016. The investment is adjusted to fair value, usinga valuation allowance account. Assume Valuation Allowance forAvailable-for-Sale Investments had a beginning balance of zero.
1. Journalize the selected transactions. Refer to the Chart ofAccounts for exact wording of account titles. Scroll down forjournal page 11. Journal 10
Journal 11
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Jarrod RobelLv2
28 Sep 2019