Accounting for Stockholders' Equity
The following transactions relate to Sunlight Mountain Inc. Prepare journal entries for each transaction. Prepare the equity section of the balance sheet at each year-end, December 31. Assume 2015 was Sunlight's first year of operations.
1. Sunlight issued 1,000 shares of $1 par value common stock for $70 per share on January 1, 2015.
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DATE
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ACCOUNT NAME
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DEBIT
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CREDIT
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BALANCE SHEET
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INCOME STMT
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A
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=
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L
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+
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E
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R
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-
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E
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1/1/15
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Common Stock
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1000
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70,000
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1000
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Share on Common Stock
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69000
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69000
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Cash
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70,000
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|
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2. Sunlight issued 500 shares of no par value, $5, non-cumulative preferred stock for $50 per share on January 1, 2015.
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DATE
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ACCOUNT NAME
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DEBIT
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CREDIT
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BALANCE SHEET
|
INCOME STMT
|
|
A
|
=
|
L
|
+
|
E
|
R
|
-
|
E
|
|
1/1/15
|
Cash
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25,000
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|
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|
|
|
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Premium on Pref.Stock
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25,000
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|
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|
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3. Sunlight reported net income of $2,000 during 2015 and paid no dividends. Prepare the company's equity section of the December 31, 2015, balance sheet.
Stockholders' Equity:
Common Stock 1,000
Preferred Stock 25,000
Additional Paid in Capital 69,000
Retained Earnings
Total Stockholders' Equity 95,000
4. On January 1, 2016, Sunlight purchased 200 shares of its common stock for $60 per share.
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DATE
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ACCOUNT NAME
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DEBIT
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CREDIT
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BALANCE SHEET
|
INCOME STMT
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|
A
|
=
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L
|
+
|
E
|
R
|
-
|
E
|
|
1/1/16
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5. On December 15, 2016, Sunlight declared and paid dividends totaling $6,600 during 2016. Prepare the company's equity section from December 31, 2016.
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DATE
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ACCOUNT NAME
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DEBIT
|
CREDIT
|
BALANCE SHEET
|
INCOME STMT
|
|
A
|
=
|
L
|
+
|
E
|
R
|
-
|
E
|
|
12/15/16
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6. Sunlight reported net income of $20,000 during 2016. Prepare the company's stockholders' equity section of the December 31, 2016, balance sheet.