Chapter 12 Practice Problem #2

Prepare journal entries for all of the below transactions.

1. February 1, ABC Company issued 25,000 shares of 5% preferred stock, $25 par value. The company received $35 cash per share.

2. February 12, ABC Company issued 150,000 shares of $5 common stock for $20 cash per share.

3. March 9, ABC Company declared a $40,000 cash dividend to all stockholders of record as of March 31. The dividend will be paid on April 30.

4. April 30, paid the cash dividend.

5. July 1, the company purchased 5,000 shares of Treasury Stock for $15 cash per share.

6. September 10, the company sold 2,000 shares of the Treasury Stock for $25 cash per share.

7. October 30, the company sold the remaining Treasury Stock for $12.50 cash per share.