On Jan 1, a company authorized common stock, $5 par for 200,000 shares & preferr

Question

On Jan 1, a company authorized common stock, $5 par for 200,000 shares & preferred stock $10 par, 7% for 50,000 shares. Record the transactions...

Issued 95,000 shares of common at $22 per share ?

Issued 18,000 shares of preferred at $13 per share?

Bought back 10,000 shares of common at $30 per share ?

Reissued 1,000 shares pf tresury stock at $27 per share ?

Declared cash dividends of $27,400 to be allocated betweens common and preferred (which preferred has current dividend preference is noncumulative) ? Paid dividends of 27,400 ?

Explanation / Answer

1]DEBIT CASH [95000*22] = 2090000

CREDIT COMMON STOCK [95000*5] = 475000

CREDIT CAPITAL PAID IN EXCESS OF PAR VALUE = 1615000

2]DEBIT CASH [18000*13] = 234000

CREDIT PREFFERED STOCK [18000*10] = 180000

CREDIT CAPITAL PAID IN EXCEES OF PAR VALUE = 54000

3]DEBIT TREASURY STOCK [10000*30] = 300000

CREDIT CASH = 300000

4]DEBIT CASH [1000*27] =27000

DEBIT PAID IN CAPITAL FROM TREASURY STOCK [(30-27)*1000] = 3000

CREDIT TREASURY STOCK = 30000

5] DEBIT DIVIDEND ON PREFERED STOCK = 12600

DEBIT DIVIDEND ON COMMON STOCK = 14800

CREDIT DIVIDEND PAYABLE ON PREFERED STOCK= 12600

CREDIT DIVIDEND PAYABLE ON COMMON STOCK = 14800

6] DEBIT DIVIDEND PAYABLE ON PREFERED ON STOCK = 12600

DEBIT DIVIDEND PAYABLE ON COMMON STOCK = 14800

CREDIT CASH = 27400

DIVIDEND PAYABLE ON PREFEERD DIVIDEND

[(18000)*10*7%] = 12600

DIVIDEND ON COMMON STOCK = 27400-12600 =14800

THANKS...PLEASE PROVIDE A FEEDBACK BY RATING MY ANSWER.

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