Sun Corporation received a charter that authorized the issuance of 105,000 shares of $5 par common stock and 21,000 shares of $100 par, 6 percent cumulative preferred stock. Sun Corporation completed the following transactions during its first two years of operation.Year 1January 5Sold 15,750 shares of the $5 par common stock for $7 per share.January 12Sold 2,100 shares of the 6 percent preferred stock for $110 per share.April 5Sold 21,000 shares of the $5 par common stock for $9 per share.December 31During the year, earned $300,500 in cash revenue and paid $241,900 for cash operating expenses.December 31Declared the cash dividend on the outstanding shares of preferred stock for Year 1. The dividend will be paid on February 15 to stockholders of record on January 10, Year 2.December 31Closed the revenue, expense, and dividend accounts to the retained earnings account.Year 2February 15Paid the cash dividend declared on December 31, Year 1.March 3Sold 3,150 shares of the $100 par preferred stock for $120 per share.May 5Purchased 450 shares of the common stock as treasury stock at $10 per share.December 31During the year, earned $254,400 in cash revenues and paid $173,000 for cash operating expenses.December 31Declared the annual dividend on the preferred stock and a $0.50 per share dividend on the common stock.December 31Closed revenue, expense, and dividend accounts to the retained earnings account.Requireda. Prepare journal entries for these transactions for Year 1 and Year 2 and post them to T-accountb. Post the entries to T-accounts Year 1. (Select "12/31 cl." for all the closing entries.)c. Post the entries to T-accounts Year 2. (Select "12/31 cl." for all the closing entries.)

Journal entries states the entries which are recorded for the day to day transactions of the company…

Answered: un Corporation received a charter that…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Sun Corporation received a charter that authorized the issuance of 105,000 shares of $5 par common stock and 21,000 shares of $100 par, 6 percent cumulative preferred stock. Sun Corporation completed the following transactions during its first two years of operation.

Year 1

January 5	Sold 15,750 shares of the $5 par common stock for $7 per share.
January 12	Sold 2,100 shares of the 6 percent preferred stock for $110 per share.
April 5	Sold 21,000 shares of the $5 par common stock for $9 per share.
December 31	During the year, earned $300,500 in cash revenue and paid $241,900 for cash operating expenses.
December 31	Declared the cash dividend on the outstanding shares of preferred stock for Year 1. The dividend will be paid on February 15 to stockholders of record on January 10, Year 2.
December 31	Closed the revenue, expense, and dividend accounts to the retained earnings account.

Year 2

February 15	Paid the cash dividend declared on December 31, Year 1.
March 3	Sold 3,150 shares of the $100 par preferred stock for $120 per share.
May 5	Purchased 450 shares of the common stock as treasury stock at $10 per share.
December 31	During the year, earned $254,400 in cash revenues and paid $173,000 for cash operating expenses.
December 31	Declared the annual dividend on the preferred stock and a $0.50 per share dividend on the common stock.
December 31	Closed revenue, expense, and dividend accounts to the retained earnings account.

Required
a. Prepare journal entries for these transactions for Year 1 and Year 2 and post them to T-account

b. Post the entries to T-accounts Year 1. (Select "12/31 cl." for all the closing entries.)

c. Post the entries to T-accounts Year 2. (Select "12/31 cl." for all the closing entries.)

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