Reference no: EM132803879

Bruno Corporation is authorized to 20,000 shares of 6%, $100 par, cumulative, convertible preferred stock and 100,000 shares, $10 par value common stock. Bruno has outstanding 6,000 shares of preferred stock and 40,000 shares of common stock on the December 31, 2019 balance sheet.

The following are selected transactions that occurred in 2020:

1. Bruno Corporation owes shares of Naple Corporation. At December 31, 2019, the securities were carried in Bruno's accounting records at the cost of $875,000 which equaled the fair value. On April 1, when the fair of the securities was $990,000, Bruno declared a property dividend whereby the Naple securities are to be distributed on April 29, 2020 to common stockholders of record on April 15, 2020.
2. Acquired 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. 
3. Bruno issued 3,000 shares of common stock and 1,000 shares of preferred stock for a lump sum of $220,000. The market price of the common stock was $38 and the preferred, $118. 
4. Preferred shareholders, who originally paid the corporation $110 per share their stock converted 5,000 shares into common stock. Each preferred share is convertible 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 be held 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 2,640 and 41,500 respectively. The common stock dividend was $2 per share. When you make this entry show separate liabilities for the preferred and common stock dividends.

Instructions:

Problem 1: Prepare the journal entries to record the above events. Be sure to show calculations and note any assumptions when completing the entry.