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On January 1, 2020, of its 100,000, $2 par value authorizied shares of common stock, Brooks Corp had 30,000 shares issued and outstanding
On January 1, 2020, of its 100,000, $2 par value authorizied shares of common stock, Brooks Corp had 30,000 shares issued and outstanding. Brooks entered into the following transactions during 2020. Jan 10 Issued an additional 10,000 shares of its common stock for $24 per share. Feb 4 Declared a 25 cents per share cash dividend, payable on March 16 to stockholders of record on Feb 28. Apr 7 Purchased 2,000 shares of the company's own common stock at $26 per share; the stock is now held in treasury. Jun 12 Issued 600 of the shares purchased on April 7 for $25 per share. Aug 3 Issued 400 of the shares purchased on April 7 for $29 per share. Oct 20 Declared a 30 cents per share cash dividend, payable on March Nov 30 to stockholders of record on Nov 8. Prepare any necessary journal entries for each date. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) Hint: Track the number of shares of stock issued and outstanding - you will need that information when accounting for the declared dividends. Note that before the 2020 transactions, Brooks had 30,000 shares of common stock issued and outstanding
Expert Solution
JOURNAL ENTRYDateParticularsDebitCredit10-JanBank A/C Dr.240,000 To Common Stock A/C20,000 To Paid in excess of par value, Common Stock A/C220,000(Issued additional common stock for $24 per share)4-FebRetained Earnings A/C Dr.10,000 To Cash Dividends Payable A/C10,000(Declared a 25 cent per share cash dividend )16-MarCash Dividend Payable A/C Dr.10,000 To Cash A/C10,000(Dividend payable on 16 march )7-AprTreasury Stock A/C Dr.52,000 To Cash A/C52,000(Repurchase 2,000 shares at $26 per share)12-JunCash A/C Dr.15,000Additional Paid-in-capital A/C Dr.600 To Treasury Stock A/C15,600(Repurchased Stock 600 sold for $25 per share)3-AugCash A/C Dr.11,600 To Treasury Stock A/C10,400 To Additional Paid-in-capital A/C1,200(400 repurchased stock sold for $29 per share)20-OctRetained Earning A/C Dr.12,300 To Cash Dividend Payable A/C12,300(Decllared 30 centdividend)4-NovCash Dividend Payable A/C Dr.12,300 To Cash A/C12,300(Dividend payed on nov 4)
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