LILY Corporation reported the following extract from their balance sheet as at December 31,

2010:
Liabilities and Equity
RM
Liabilities:
12% Note payable
5,000
Interest payable
300
Other liabilities
55,000
Stockholders equity:
5% cumulative preferred stock, RM 2 par
40,000
Common stock, RM 1 par
100,000
Additional paid-in capital (share premium)
60,000
Retained earnings
85,000
Total liabilities and equity
345,300
During 2011, Lily Corporation completed these transactions on liabilities and stockholders
equity:
Jan. 2
Issued 60,000 shares of common stock for RM 3 per share.
July 1

Declared and paid a 2% interim dividend on the common stock outstanding.

July 1

Paid the RM 5,000 note payable. (The note was issued on 1 July 2010 and carried
a 12% interest rate with the interest and principal payable on 1 July 2011. Interest
on the note payable was accrued on December 31, 2010).

July 1

Issued a RM 100,000, 10-year, 10% bond at an issuance price of 98. Interest is

payable semi-annually on June 30 and December 31. The company decided to
amortize the discount on bond over the 10 years.

Aug. 1

Issued 60,000 shares of 5% preferred stock for RM5 per share.

Nov. 19

Reacquired 15,000 shares of common stock as treasury stock, paying RM 4 per

share.

Dec. 15

Sold 5,000 shares of the treasury stock for RM 5 per share.

Dec. 30

Distributed common stock dividend of 1 common stock for 3 currently held. The
company used its retained earnings for the purpose of giving stock dividends. The
market value of the common stock was RM3 per share.

Dec. 30

Paid the current years dividend on the preferred stock.

Dec. 31

Paid the bond interest and amortize the bond discount.

Required:
1. Journalize the above transactions.
2. Prepare the liability and shareholders equity sections of the statement of financial
position at December 31, 2011.