On January 1, 20x7, Hobbes Inc. had 50,000 shares of common shares issued and outstanding. The book value of those shares was $800,000. Furthermore, they had 20,000 $4, non-cumulative, preferred shares issued and outstanding which had a book value of $300,000.

The following transactions took place in 20x7:

 Jan 31  Issued 50,000 common shares for $500,000

 Mar 1   Issued 20,000 common shares for $240,000

 Apr 30  Repurchased and cancelled 20,000 shares at $11 each.

 June 30 A 2:1 stock split was announced

 Aug 15 Issued 50,000 common shares for land and a building. An independent appraisal indicated that the market value of the building was $100,000 and the land was $350,000
 Dec 15 Declared a divided of $2.00/share to shareholders of record on Dec 31.

Required -
Prepare all journal entries to record the above transactions. Round any units to two decimals

Answer rating: 100% (QA)

Date Accounts Debit Credit Jan 31 Cash 500000 Common s... View the full answer