Comprehensive Problem 4 Part 1:

Selected transactions completed by Equinox Products Inc. during the fiscal year ended December 31, 20Y5, were as follows:

1. Journalize the selected transactions.

If no entry is required, select "No entry required" from the dropdown. If an amount box does not require an entry, leave it blank.

a. Issued 15,000 shares of $20 par common stock at $30, receiving cash.

Description	Debit	Credit
Cash
Common Stock
Paid-In Capital in Excess of Par-Common Stock

b. Issued 4,000 shares of $80 par preferred $1 stock at $100, receiving cash.

Description	Debit	Credit
Cash
Preferred Stock
Paid-In Capital in Excess of Par-Preferred Stock

c. Issued $500,000 of 10-year, 5% bonds at 104, with interest payable semiannually.

Description	Debit	Credit
Cash
Bonds Payable
Premium on Bonds Payable

d. Declared a quarterly dividend of $0.50 per share on common stock and $1.00 per share on preferred stock. On the date of record, 100,000 shares of common stock were outstanding, no treasury shares were held and 20,000 shares of preferred stock were outstanding.

Description	Debit	Credit
Cash Dividends
Cash Dividends Payable
Common stock
Cash Dividends
Cash Dividends Payable
Preferred stock

e. Paid the cash dividends declared in (d).

Description	Debit	Credit
Cash Dividends Payable
Cash

f. Purchased 4% bonds issued by Solstice Corp. as an available-for-sale investment for $300,150.

Description	Debit	Credit
Cash
Available-for-Sale Investments-Solstice Corp. Bonds

g. Purchased 8,000 shares of treasury common stock at $33 per share.

Description	Debit	Credit
Treasury Stock
Cash

h. Purchased 40,000 shares of Pinkberry Co.s common stock directly from the founders for $24 per share. Pinkberry has 125,000 shares issued and outstanding.

Description	Debit	Credit

i. Declared a $1.00 quarterly cash dividend per share on preferred stock. On the date of record, 20,000 shares of preferred stock had been issued.

Description	Debit	Credit
Cash Dividends
Cash Dividends Payable

j. Paid the cash dividends to the preferred stockholders.

Description	Debit	Credit
Cash Dividends Payable
Cash

k. Received $27,500 dividend from Pinkberry Co. investment in (h).

Description	Debit	Credit

l. Purchased $90,000 of Dream Inc. 10-year, 5% bonds, directly from the issuing company, at their face amount plus accrued interest of $375. The bonds are a held-to-maturity investment.

Description	Debit	Credit

m. Sold, at $38 per share, 2,600 shares of treasury common stock purchased in (g).

Description	Debit	Credit

n. Received interest of $6,000 from the Solstice Corp. investment in (f).

Description	Debit	Credit

o. Sold Solstice Corp. bonds with a face value of $40,020 for $45,000, realizing a gain of $4,980.

Description	Debit	Credit

p. Recorded the payment of semiannual interest on the bonds issued in (c) and the amortization of the premium for 6 months. The amortization is determined using the straight-line method.

Description	Debit	Credit

q. Accrued interest for 3 months on the Dream Inc. bonds purchased in (l).

Description	Debit	Credit

r. Pinkberry Co. reported total earnings of $240,000. Equinox Products recorded its share of Pinkberry Co. net income using the equity method.

Description	Debit	Credit

s. The Solstice Corp. bonds have a fair value of $253,630 on December 31, 20Y5. Valuation Allowance for Available-for-Sale Investments had a balance of zero on January 1, 20Y5.

Description	Debit	Credit