P13-41A Journalizing stock issuance and cash dividends and preparing the Learnin
ID: 2518904 • Letter: P
Question
P13-41A Journalizing stock issuance and cash dividends and preparing the Learning Objectives 2, 4 stockholders' equity section of the balance sheet 2. Total Stockholders' Equity $454,000 D-Mobile Wireless needed additional capital to expand, so the business incorporated. The charter from the state of Georgia authorizes D-Mobile to issue 50,000 shares of 8%, $50 par value cumulative preferred stock and 160,000 shares of $4 par value common stock. During the first month, D-Mobile completed the following transactions Issued 19,000 shares of common stock for a building with a market value of $240,000. Oct. 2 6 Issued 600 shares of preferred stock for $140 per share. 9 Issued 11,000 shares of common stock for cash of $55,000. 10 Declared a $19,000 cash dividend for stockholders of record on Oct. 20. Use a separate Dividends Payable account for preferred and common stock. Paid the cash dividend. 25Explanation / Answer
1. Journal Entry
2.
Date Particulars Debit Amount Cr. Amount 2-Oct Buildings a/c…..dr 240000 To Common Stock 76000 To paid in capital (in excess of par-Common) 164000 (Being recording of issue of common stock (4*19000) in exchange to buildings) 6-Oct Cash a/c……dr ($140*600) 84000 To Preferred Stock ($50*600) 30000 To Paid in Capital(in excss of par-Preferred) 54000 (Being record of issue of preferred stock at market value) 9-Oct Cash a/c…….dr (11000*5) 55000 To Common Stock (11000*4) 44000 To Paid in capital (in excess of par-Common) 11000 (Being record of issuance of common stock at market value) 10-Oct Dividends a/c………dr 19000 To dividends Payable a/c - Preferred(600*50*8%) 2400 To dividends Payable a/c - Common(19000-2400) 16600 (Being record of declaration of dividends) 25-Oct Dividends payable a/c……..dr 2400 To Cash a/c 16600 (Being recording of dividends) 19000Related Questions
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