Question

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The shareholder's equity section of Hamilton Corporation at December 31, 2018, included the following:
- Preferred share, $2, cumulative, 10,000 shares authorized, 8,000 shares issued .......... $320,000
- Common shares, unlimited number authorized, 300,000 shares issued ......................... $2,400,000

Dividends were not declared on the preferred shares in 2018 and are in arrears.

The following transactions occurred during 2019
1) Issued 100,000 common shares for cash at $9 per share on March 1
2) Declared a preferred dividend for 2018 and 2019 on September 1st, to the preferred shareholders of record on September 20th, payable on September 30th
3) Issued 2,000 preferred shares on November 28, 2019 for cash at $42 per share
4) Declared a $.30 (30 cent) dividend on December 5, 2019, to the common shareholders of record on December 20,2019, payable on December 31st, 2019

REQUIRED: Prepare the journal entries for all transactions. If no entry is needed write "No entry required". No explanations required but show any calculations.

Answer 1

ANSWER

TRANS. # Remarks (100,000 shares x $9] (100,000 shares x ($2,400,000/300,000)] [Balancing figure] 2-a) [8,000 shares x $2] (8,000 shares x $2] [As it is cumulative, arrear dividends are also payable along with current dividend] [Ref: Entry dated Sept. 1] 2-b) DATE General Journal Debit Credit Mar.1 Cash $900,000 Common Stock $800,000 Paid in Capital in excess of Par - Common $100,000 (To record common stock issued) Sep. 1 Cash Dividends $16,000 Arrear Dividends $16,000 Dividends Payable $32,000 (To record cash dividends declared on cumulative preferred stock for 2018 and 2019) Sep. 30 Dividends Payable $32,000 Cash $32,000 (To record payment of preferred dividends declared) Nov. 28 Cash $84,000 Preferred Stock $80,000 Paid in Capital in excess of Par - Preferred $4,000 (To record preferred stock issued) Dec. 5 Cash Dividends $120,000 Dividends Payable $120,000 (To record cash dividends declared on common stock) Dec. 31 Dividends Payable $120,000 Cash $120,000 (To record common cash dividends paid) 3) [2,000 shares x $42] [2,000 shares x ($320,000 / 8,000)] [Balancing figure] [(300,000 + 100,000) shares x $0.30] [Ref: Entry dated Dec. 5]

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