Question

Original Octave Inc. (OOI) is a widely held, publicly traded company that designs equipment for tuning musical instruments. Information pertaining to its shareholders’ equity is as follows.
The preferred share dividend was not paid in 2011. Several transactions affecting shareholders’ equity took place during the fiscal year ended December 31, 2012, and are summarized in chronological order as follows.
1. Exchanged 10,000 common shares for a prototype piano tuning machine. The machine was appraised at $110,000. On the transaction date, OOI’s shares were actively trading at $10 per share.
2. Purchased and retired 10,000 common shares at $15 per share.
3. Paid the annual dividend on the preferred shares. The common shares were then paid a $2 per share dividend.
Instructions
Prepare journal entries for each of the three transactions.


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  • CreatedAugust 23, 2015
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