Question: Need help with the balance sheet at the end Continuing Problem: Front Row Entertainment After purchasing the five venues in June 2014, Front Row needed
Need help with the balance sheet at the end
Continuing Problem: Front Row Entertainment After purchasing the five venues in June 2014, Front Row needed additional cash to renovate and operate these venues. While the company had successfully borrowed money before (from bank loans as well as from the issuance of bonds), it could not find a lender willing to invest in the business due to the large amount of debt that the company currently has on its balance sheet. With debt financing out of the question, Front Row considers its other options. The name of an old college friend, Steve Trotter, immediately comes to Cam and Anna's mind. Steve has previous work experience in the retail industry and expressed a desire to manage Front Row's current merchandising operations (the sale of DVDs). His vision was to expand the operations to include apparel (t-shirts, hats, etc.) and other items (such as bobble-head dolls of the artists). In addition, several other family members have expressed an interest in investing in the company. Front Row was authorized to issue 25,000 shares of its $1 par common stock. On January 1, 2013, it issued Cam and Anna 8,000 shares each for $1 per share. Front Row was also authorized to issue 20,000 shares of 8%, $50 par preferred stock. The following transactions occurred during the remainder of 2014. June 15 Issued 2,000 shares of $1 par common stock to Steve for $20 per share. July 1 Issued 3,000 shares of $50 preferred stock to family members for $75 per share. 10 Repurchased 700 common shares at $16 per share Aug. 5 The board of directors declared a $25,000 dividend to all stockholders of record on August 31, 2014. The dividend will be paid on September 15, 2014. Sept. 15 The $25,000 dividend was paid. Dec. 15 300 of the treasury shares were reissued at $22 per share. Front Row had $53,250 of retained earnings to be included in the December 31, 2014 balance sheet. Required: Prepare the journal entries to record the above transactions. For a compound transaction, if an amount box does not require an entry, leave it blank. When companies sell common or preferred stock to raise capital, the resulting ownership claims are recorded in the capital stock section of stockholders' equity. See Cornerstone 10-1. When companies sell common or preferred stock to raise capital, the resulting ownership claims are recorded in the capital stock section of stockholders' equity. See Cornerstone 10-1. When purchasing its own previously issued stock, corporations record a reduction to stockholders' equity by debiting treasury stock. See Cornerstone 10-2. Dividends become an obligation to the company on the date of declaration. See Cornerstone 10-3. The obligation incurred at the date of declaration is retired when the dividends are paid. See Cornerstone 10-3. When purchasing its own previously issued stock, corporations record a reduction to stockholders' equity by debiting treasury stock. See Cornerstone 10-2. Prepare the stockholders' equity section of the balance sheet at December 31, 2014. Set up T-accounts for all stockholders' equity accounts included in the transactions. Record the debits and credits from all journal entries to each account to determine an ending balance. Use these balances to prepare a statement of stockholders' equityStep by Step Solution
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