Question

Required information [The following information applies to the questions displayed below.) Nautical has two classes of stock authorized: $10 par preferred, and $1 par value common. As of the beginning of 2021. 150 shares of preferred stock and 2.800 shares of common stock have been issued. The following transactions affect stockholders' equity during 2021 March 1 Issue 2,880 additional shares of common stock for $12 per share. April 1 Issue 150 additional shares of preferred stock for $38 per share. June 1 Declare a cash dividend on both common and preferred stock of $0.35 per share to all stockholders of record on June 15. June 30 Pay the cash dividends declared on June 1. August 1 Purchase 250 shares of common treasury stock for $9 per share. October 1 Reissue 150 shares of treasury stock purchased on August 1 for $11 per share. Nautical has the following beginning balances in its stockholders' equity accounts on January 1, 2021: Preferred Stock, $1,500, Common Stock, $2,800, Additional Paid-in Capital, $19,300; and Retained Earnings, $11,300. Net income for the year ended December 31, 2021, is $7.550. Required: 1. 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 View journal entry worksheet No Date General Journal Debit Credit < Prev 2 or 10 m Next >

Answer 1

Solution:

Journal Entries - Nautical
Date	Particulars	Debit	Credit
1-Mar	Cash Dr	$33,600.00
	To Common stock		$2,800.00
	To Paid in capital in excess of par - Common stock		$30,800.00
	(To record issue of common stock)
1-Apr	Cash Dr	$5,700.00
	To Preferred stock		$1,500.00
	To Paid in capital in excess of par - Preferred stock		$4,200.00
	(To record issue of preferred stock)
1-Jun	Dividends Dr	$2,065.00
	To Dividend payable (300*$0.35 + 5600*$0.35)		$2,065.00
	(To record dividend declared)
30-Jun	Dividend payable Dr	$2,065.00
	To Cash		$2,065.00
	(To record dividend payment)
1-Aug	Treasury stock Dr	$2,250.00
	To Cash		$2,250.00
	(To record purchase of treasury stock)
1-Oct	Cash Dr	$1,650.00
	To Treasury stock		$1,350.00
	To Additional paid in capital		$300.00
	(To record reissue of treasury stock)