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Unformatted text preview: As of January 1, 2012, ABC Inc. had the following balances in their Shareholders' Equity Accounts Retained Earnings 200,000 Common Shares (50,000 authorized, 30,000 issued) 150,000 Preferred Shares (10,000 authorized, 5,000 issued, cumulative, 5% annually) 100,00 0 ABC Inc. has not paid dividends since January 1, 2010. On September 1, 2012, ABC Inc. issued 10,000 more common shares for a note receivable that would pay $93,676 in 5 years with an annual interest rate of 6% (all interest expense accumulates and is paid out on August 30, 2017, that is, there is no interest paid in cash until 2017). a) Record the journal entry for the issuance of the shares on September 1, 2012. Note Receivable 70,000 Common Shares 70,00 0 NOTE: TREAT b) AND c) AS SEPARATE CASES b) Assume ABC Inc. announced dividends of $12,000 on December 30, 2012, and a dividend of b) Assume ABC Inc....
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- Fall '08