Earth Star Diamonds Inc. began a potentially lucrative mining operation on October 1, 2023. It is authorized
Question:
Earth Star Diamonds Inc. began a potentially lucrative mining operation on October 1, 2023. It is authorized to issue 100,000 shares of $0.60 cumulative preferred shares and 500,000 common shares.
Part A
RequiredPrepare journal entries for each of the transactions listed.
Part B
RequiredBased on the transactions in Part A, prepare the balance sheet as at October 31, 2023.
Oct. 1 Issued for cash, 1,000 shares of the preferred shares at $4.80 each. 10 Issued for cash, 50,000 shares of the common shares at $3.60 per share. 15 Earth Star purchased land for $186,000, paying cash of $66,000 and borrowing the balance from the bank (to be repaid in two years). 15,000 preferred shares were issued today for total cash proceeds of $84,600. 20 24 In addition to the declaration of the annual dividend on the preferred shares, dividends of $26,880 were declared on the common shares today, payable November 15, 2023. 31 Revenues of $900,000 were earned during the month; all cash. Expenses, all cash, totalling $300,000 were incurred in October. Close the Income Summary and dividend accounts.
Step by Step Answer:
Part A 2023 Oct 1 Cash Preferred Shares Issued preferred shares 1000 shares 480share 10 Ca...View the full answer
Fundamental Accounting Principles Volume 2
ISBN: 9781260881332
17th Canadian Edition
Authors: Kermit D. Larson, Heidi Dieckmann, John Harris
Related Video
A journal entry is an act of keeping or making records of any transactions either economic or non-economic. Transactions are listed in an accounting journal that shows a company\'s debit and credit balances. The journal entry can consist of several recordings, each of which is either a debit or a credit
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