Reference no: EM132922874
Exercise 1 - The Norman Corporation's stockholders' equity accounts have the following balances as of January 1, 2016:
Common stock, $10 par (60,000 shares issued and outstanding) $600,000
Additional paid-in capital: common 1,500,000
Retained earnings 1,200,000
Total stockholders' equity $3,300,000
Norman engaged in the following dividend transactions during 2016:
March 1: Declared a 50% stock dividend on the common stock, distributable on April 10. The market price per share for the common stock was $35 on March 1.
April 10: Distributed the stock dividend declared on March 1.
Required - Prepare the entries to record the dividend transactions for 2016. (Do not record the cash dividend payment in 2017.)
Exercise 2 - ISSUANCE OF A BOND - Determine the selling price (present value) of the following bonds and make the journal entry to record the issue of each bond.
1. A $10,000 five-year bond is sold at 11% when the interest rate is 12%. The bond pays interest semi-annually.
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