Question

Epple Corporation is authorized to 20,000 shares of 6%, $100 par, covertible, callable preferred stock and 100,000 shares of no par, $10 stated value common stock. Epple has outstanding 6,000 shares of preferred stock and 40,000 shares of common stock on January 1, 2017. The following are selected transactions for the current year:

*in US dollars

Instructions:

Prepare the journal entries to record the above events.

Be sure to show calculations and note any assumptions when completing the entry.

Please provide answers in US dollars

1.)

Purchased land by issuing 640 shares of preferred stock and 1,000 shares of common stock. The preferred and common stock are selling at $113 and $36 per share, respectively. The land was appraised at $112,000.

2.)

On March 1, the company into a subscription contract with subscribers for 4,000 shares of common stock for a price of $38 per share. The contract required a down payment of 25% with the balance due June 1.

3.)

On June 1, all stock subscriptions were paid in full.

4.)

Preferred shareholders, who originally paid the corporation $110 per share their stock converted 6,500 shares in common stock. Each preferred share is covertible into 3 shares of common stock. The current market price of the preferred stock and the common stock is $120 and $41 per share, respectively.

5.)

The company purchased 4,000 shares of its common stock at a price of $40 per share to beheld in treasury. The company uses the cost method.

6.)

The company sold 500 shares of its common treasury stock for $42 per share.

7.)

The company sold 1,000 shares of its common treasury stock for $37 per share.

8.)

The board of directors declared a cash dividend for the year. The preferred and common shares outstanding on this date were 4,140 and 62,000 respectively. The common stock dividend was $2 per share. When you make this entry show separate liabilities for the preferred and common stock dividends.