Wheeler Corporation was authorized to issue 100,000 shares of $6 par common stock. On June 30, Year 1, Wheeler issued 20,000 shares at an issue price of $9 per share. On December 1, Year 1, Wheeler declared a cash dividend of $1.25 per share. The dividend is payable on December 30 to stockholders of record as of December 15. Required:a) Prepare the journal entry for the issuance of the 20,000 shares of stock. b) Prepare the journal entries required on each of the following dates:(1) Declaration date(2) Date of record(3) Payment date
What will be an ideal response?
| a) | ? | ? | ? |
| 6/30 | Cash | 180,000 | ? |
| ? | Common stock, $6 par value | ? | 120,000 |
| ? | Paid-in capital in excess of par-common | ? | 60,000 |
| ? | ? | ? | ? |
| b)(1) 12/1 | Dividends | 25,000 | ? |
| b)(2) | Dividends payable | ? | 25,000 |
| b)(3) 12/15 | No entry | ? | ? |
| 12/30 | Dividends payable | 25,000 | ? |
| ? | Cash | ? | 25,000 |
Common stock = 20,000 shares × Par value of $6 = $120,000
Paid-in capital in excess of par value-common = 20,000 shares × (Issue price of $9 per share ? Par value of $6 per share) = $60,000
b)
Dividends = 20,000 shares × Dividend of $1.25 per share = $25,000
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