I have three questions regarding treasury stock, common stock and bonds.

I have three questions regarding treasury stock, common stock and bonds.

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1
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On May 1, 2013 Green Corp issued $1,000,000 of 12% bonds, dated January 1, 2013,
for $975,000 plus accrued interest. The bonds mature on Dec 3, 2027, and pay interest
semiannually on June 30 and December 31. Green’s fiscal year ends on December 31
each year.
Instructions:
1.
Determine the amount of accrued interest that was included in the proceeds received
from the bond sale. (Show calculations)
2.
Prepare the journal entry for the issuance of the bonds.
2.
On January 1, 2013, Shamu Corporation had 100,000 shares of common stock
outstanding. The following transactions occurred during 2013:
March 1:
Reacquired 3,000 shares, accounted for as treasury stock
Sep 30:
Sold all the treasury shares
Dec 1:
Sold 12,000 new shares for cash
Dec 31:
Reported a net income of $198,500
The following transactions occurred during 2014:
Jan 10: Declared and issued a 25% stock dividend
Dec 31: Reported a net income of $268,800
Instructions:
Calculate Shamu’s basic earning per share (rounded to 2 decimal places) for both years
for presentation in comparative financial statements that will be prepared at the end of
2014.
3.
In 2012, Mordica Co. issued 300,000 of its 500,000 authorized shares of $10 par
value common stock at $35 per share. In January, 2013, Mordican repurchased 20,000
shares at $30 per share. Assume these are the only stock transactions the company
ever had.
Instructions:
1.
What are the two methods of accounting for treasury stock?
2.
Prepare the journal entry to record the purchase of treasury stock by the cost
method.
3.
7,000 shares of treasury stock are reissued at $33 per share. Prepare the journal
entry to record the reissuance by the cost method.

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