Question

Thought Comfort Specialists, Inc. reported the following stockholders' equity on its balance sheet of June 30, 2018: Click the loon to view the partial balance sheet) Read the requirements Requirement 1. Identity the different classes of stock that thoughtful Comfort Specialists has standing Thoughtful has preferred stock and common stock outstanding. Requirement 2. What is the par value per share of Thoughtful Comfort Specialists preferred stock? The par value of preferred stock is $ 5 por share Requirement 3. Make two summary journal entries to record issuance of all the Thought Comfort Specialists' stock for cash. Explanations are not required. (Record debits first, then credits. Exdude explanations from any journal entries.) Begin by recording the issuance of the preferred stock. Credit Accounts Date Cash

Answer 1

Req 1)	preferred and common stock
Req 2)
	par value of preferred stock			5		(1,600,000/320,000)
Req3)	Date	Accounts			Debit	Credit
		Cash			1,600,000
		preferred stock				1,600,000
		Cash			4,110,000
		common stock				1,310,000
		paid in capital in excess of par				2,800,000
Req 4)	Date	Accounts			Debit	Credit
	30-Jun	Cash dividend			700,000
		Dividends payable-preferred				112000		(1,600,000*7%)
		Dividends payable-common stock				588,000
	20-Jul	Dividends payable-preferred			112,000
		Dividends payable-common stock			588,000
		Cash				700,000