During its first year of operations, Cupola Fan Corporation issued 30,000 of $1 par Class B shares

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During its first year of operations, Cupola Fan Corporation issued 30,000 of $1 par Class B shares for $385,000 on June 30, 2018. Share issue costs were $1,500. One year from the issue date (July 1, 2019), the corporation retired 10% of the shares for $39,500.
Required:
1. Prepare the journal entry to record the issuance of the shares.
2. Prepare the journal entry to record the declaration of a $2 per share dividend on December 1, 2018.
3. Prepare the journal entry to record the payment of the dividend on December 31, 2018.
4. Prepare the journal entry to record the retirement of the shares.
You may wish to compare your solution to this problem with that of P 14-16, which deals with parallel issues of debt issue costs and the retirement of debt.
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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Intermediate Accounting

ISBN: 9781259722660

9th Edition

Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas

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