Kroll Corporation reports the following components of stockholders’ equity on December 31, 2011. Common stock—$28 par value, 48,000 shares authorized, 38,000 shares issued and outstanding $ 1,064,000 Paid-in capital in excess of par value, common stock 54,000 Retained earnings 272,000 Total stockholders’ equity $ 1,390,000 In year 2012, the following transactions affected its stockholders’ equity accounts. Jan. 2 Purchased 2,400 shares of its own stock at $28 cash per share. Jan. 7 Directors declared a $2 per share cash dividend payable on Feb. 28 to the Feb. 9 stockholders of record. Feb. 28 Paid the dividend declared on January 7. July 9 Sold 500 of its treasury shares at $33 cash per share. Aug. 27 Sold 1,900 of its treasury shares at $26 cash per share. Sept. 9 Directors declared a $2 per share cash dividend payable on October 22 to the September 23 stockholders of record. Oct. 22 Paid the dividend declared on September 9. Dec. 31 Closed the $11,000 credit balance (from net income) in the Income Summary account to Retained Earnings. Required: 1. Prepare journal entries to record each of these transactions for 2012.

Kroll Corporation reports the following components of stockholders’ equity on December 31, 2011.

  

Common stock—$28 par value, 48,000 shares authorized,     38,000 shares issued and outstanding	$	1,064,000
Paid-in capital in excess of par value, common stock		54,000
Retained earnings		272,000
Total stockholders’ equity	$	1,390,000

 

In year 2012, the following transactions affected its stockholders’ equity accounts.

 

Jan.	2	Purchased 2,400 shares of its own stock at $28 cash per share.
Jan.	7	Directors declared a $2 per share cash dividend payable on Feb. 28 to the Feb. 9 stockholders of record.
Feb.	28	Paid the dividend declared on January 7.
July	9	Sold 500 of its treasury shares at $33 cash per share.
Aug.	27	Sold 1,900 of its treasury shares at $26 cash per share.
Sept.	9	Directors declared a $2 per share cash dividend payable on October 22 to the September 23 stockholders of record.
Oct.	22	Paid the dividend declared on September 9.
Dec.	31	Closed the $11,000 credit balance (from net income) in the Income Summary account to Retained Earnings.

  

Required:

1.

Prepare journal entries to record each of these transactions for 2012.   Explanation: 1.   Jan. 2   Treasury Stock (2,400 × $28) = 67,200         Jan. 7   Common Dividend Payable ($2 dividend per share on 35,600) = 71,200         July 9   Cash (500 × $33) = 16,500     Treasury Stock, Common (500 × $28) = 14,000     Paid-In Capital, Treasury Stock (500 × $5) = 2,500         Aug. 27   Cash (1,900 × $26) = 49,400     Treasury Stock, Common (1,900 × $28) = 53,200         Sept. 9   Common Dividend Payable ($2 dividend per share on 38,000) = 76,000