Question

B. (Recording the Issuance of Common and Preferred Stock) Envy Gas Corporation was organized on June 1, 2019. It is authorized to issue 100,000 shares of 5%, $100 par value preferred stock, and 1,750,000 shares of no par common stock with a stated value of $1 per share. The following stock transactions were completed during the first year. June 15 Issued 165,000 shares of common stock for cash at $5 per share. June 30 Issued 25,000 shares of preferred stock for cash at $102 per share. Aug. 15 Issued 27,000 shares of common stock for a factory building. The asking price of the factory building was $150,000; the appraised value of the factory building was $140,000. Sept. 1 Issued 200,000 shares of common stock for cash at $7 per share. Oct. 1 Issued 5,000 shares of common stock to attorneys upon receipt of their $40,000 invoice for services rendered in helping to settle a lawsuit. Nov. 1 Issued 6,000 shares of preferred stock for cash at $104 per share. Instructions 1) Calculate the amount of the annual dividend assigned to one share of preferred stock. 2) Prepare the journal entries to record the above transactions. 3) On November 30, 2019, the Board of Directors declared a $0.10 dividend on Common shares and therefore also declared a dividend on preferred shares, payable on December 24, to shareholders of record on December 10. (a) How much is the total dividend to Preferred Shareholders. (b) Calculate the total dividend. (©) Prepare the journal entries to record the dividends.(CkFig: $194,700)

need help on number one, two, and three

Answer 1

1	Annual dividend assigned to one share of preferred stock=Par value of preferred stock*Preferred stock%=100*5%=$5
2	Journal entries;
	Date	Account titles and explanation						Debit	Credit
	June 15.	Cash				(165000*5)		825000
		Common stock				(165000*1)			165000
		Paid in capital in excess of par-common stock					(Plug)		660000
		(Common stock issued for cash)
	June 30.	Cash				(25000*102)		2550000
		Preferred stock				(25000*100)			2500000
		Paid in capital in excess of par-preferred stock					(Plug)		50000
		(Preferred stock issued for cash)
	Aug 15.	Building						140000
		Common stock				(27000*5)			135000
		Paid in capital in excess of par-common stock					(Plug)		5000
		(Common stock issued for building)
	Sep 1.	Cash				(200000*7)		1400000
		Common stock				(200000*5)			1000000
		Paid in capital in excess of par-common stock					(Plug)		400000
		(Common stock issued for cash)
	Oct 1.	Legal expense						40000
		Common stock				(5000*5)			25000
		Paid in capital in excess of par-common stock					(Plug)		15000
		(Common stock issued for cash)
	Nov 1.	Cash				(6000*104)		624000
		Preferred stock				(6000*100)			600000
		Paid in capital in excess of par-preferred stock					(Plug)		24000
		(Preferred stock issued for cash)
3
a)	Total dividend to preferred shareholders=Total number of preferred shares issued*annual dividend assigned to one share of preferred stock=(25000+6000)*5=31000*5=$ 155000
b)	Total dividend=Common dividend+Preferred dividend
	Common dividend=Number of common shares*dividend per share=(165000+27000+200000+5000)*0.10=397000*0.10=$ 39700
	Total dividend=39700+155000=$ 194700
c)	Journal entries:
	Date	Account titles and explanation					Debit	Credit
	Nov 30.	Cash dividend					39700
		Preferred dividend					155000
		Dividend payable						194700
		(Dividend declared)
	Dec 24.	Dividend payable					194700
		Cash						194700
		(Dividend paid)