Sweetwater Inc. declares a 40% stock dividend on its 100,000…

Sweetwater Inc. declares a 40% stock dividend on its 100,000 common shares outstanding. Just prior to the declaration of the dividend Sweetwater Inc.’s common stock had a $4 par value and a $25 market value. What amount of retained earnings should be transferred to the common stock account?

On January 1, 2020, Sweetwater Inc. issued $3 million of 5 y…

On January 1, 2020, Sweetwater Inc. issued $3 million of 5 year bonds at an 10% stated interest rate to be paid annually. Sweetwater Inc. issued the bonds at 103 since the market rate of interest was 9%. What amount would Sweetwater Inc. report as the interest expense of the bond on the income statement for the year ending December 31, 2021 (round to the nearest dollar).

Braun Company acquired a piece of equipment from Tipper Comp…

Braun Company acquired a piece of equipment from Tipper Company under a lease. The lease requires eight annual lease payments of $30,000 with the first payment due when the lease begins, on January 1, 2020. Future lease payments are due on January 1 of each year of the lease term.  The interest rate in the lease is 6%.  What amount should Braun Company debit the equipment account on the date of acquisition.