Sudan Enterprises Inc. reported the following shareholder’s equity at December 31, 2019:

Contributed Capital

           Preferred shares, $ 1, no par value, 100,000 shares authorized, cumulative,

                      callable at $ 107 plus dividends in arrears;

                      issued and outstanding, 20,000 shares...........................................................    $ 2,040,000

           Common shares, no par, 100,000 shares authorized,

                      80,000 issued and outstanding.......................................................................            640,000

           Contributed surplus (retirement of common shares)..............................................            120,000

           Retained earnings.................................................................................................        1,600,000

The following transactions took place in 2020:

Jan 20.... retire 1,000 preferred shares at the call price. There were no dividends in arrears.

Jan 28.... Declared $ 100,000 in dividends. Use separate accounts for each class of dividends.

Feb 28.... Retired 8,000 common shares at $ 12 per share.

Mar 2..... Declared and distributed a 3% common stock dividend. The market value of the shares at that time was $ 11.50.

Instructions

Prepare journal entries for the 2020 transactions.

Answer rating: 100% (QA)

Sudan Enterprises Inc Journal entries Debit Credit Preferred shares 204000020000 x 1000 Retain... View the full answer