Problem:
Journalize the selected transactions
Selected transactions completed by Hubcap Products Inc. during the fiscal year ending July 31, 2006, were as follows:
1. Issued 10,000 share of $25 par common stock at $52, receiving cash.
2. Issued 8,000 shares of $100 par preferred 8% stock at $125, receiving cash.
3. Issued $12,000,000 of 10 year, 11% bonds at an effective interest rate of 10%, with interest payable semiannually. Use the present value tables to determine the bond proceeds. Round to the nearest dollar.
4. Declared a cash dividend of $0.25 per share on common stock and $2 per share on preferred stock. On the date of record, 100,000 shares of common stock were outstanding, no treasury shares were held, and 15,000 shares of preferred stock were outstanding.
5. Paid the cash dividends declared in (d).
6. Purchased 5,000 shares of treasury common stock at $50 per share.
7. Declared a 2% stock dividend on common stock and a $2 cash dividend per share on preferred stock. On the date of declaration, the market value of the common stock was $51 per share. On the date of record, 100,000 shares of common stock had been issued, 5,000 shares of treasury common stock were held and 15,000 shares of preferred stock had been issued.
8. Issued the stock certificates for the stock dividends declared in (h) and paid the cash dividends to the preferred stockholders.
9. Sold at $58 per share, 3000 shares of treasury common stock purchased in (g).
10. Recorded the payment of semiannual interest on the bonds issued in (c) and the amortization of the premium for six months. The amortization was determined using the straight line method. (Round the amortization to the nearest dollar.)