Question -
1. On January 1, 2013, Warren Corporation had 1,000,000 shares of common stock outstanding. On March 1, the corporation issued 150,000 new shares to raise additional capital. On July 1, the corporation declared and issued a 2-for-1 stock split. On October 1, the corporation purchased on the market 400,000 of its own outstanding shares and retired them.
Required: Compute the weighted-average number of shares to be used in computing earnings per share for 2013.
2. On April 1, 2012, West Co. purchased $320,000 of 6% bonds for $332,600 plus accrued interest as an available-for-sale security. Interest is paid on July 1 and January 1 and the bonds mature on July 1, 2017.
Required:
(a) Prepare the journal entry on April 1, 2012.
(b) The bonds are sold on November 1, 2013 at 103 plus accrued interest. Amortization was recorded when interest was received by the straight-line method (by months and round to the nearest dollar). Prepare all entries required to properly record the sale.