Question

Italian Stallion has the following transactions during the year related to stockholders' equity February 1 Issues 5,800 shares of no-par common stock for $14 per share. May 15 Issues 400 shares of $10 par value, 11.5% preferred stock for $11 per share. October 1 Declares a cash dividend of $1.15 per share to all stockholders of record (both common and preferred) on October 15. October 15 Date of record. October 31 Pays the cash dividend declared on October 1. Required: Record each of these transactions (If no entry is required for a particular transaction/event, select "No Journal Entry Required in the first account field.) View transaction list Journal entry worksheet Record the issuance of 5,800 shares of no par common stock for 514 per share < Prey 6 of 10 Next > le to search

Answer 1

Solution: No. Credit Debit $ 81,200 Date General Journal Feb-01 Cash (5,800 x $14) Common stock (To record the issue of 5,800 shares for $14 per share) $ 81,200 $ 4,400 May-15 Cash (400 x $11) Preferred stock (400 x $10) Additional Paid-in capital (400 x $1) (To record the issue of 400 preferred shares for $11 per share) $ 4,000 $ 400 3 $ 7,130 $ 7,130 Oct-01 Dividends ([5,800 + 400) < $1.15) Dividends payable (To record the declaration of cash dividend on both common and preferred stock @$1.15 per share) Oct-15 No Journal entry Oct-31 Dividends payable $ 7,130 Cash $ 7,130 (To record the payment of cash dividend)