Question

Check 9 1. Prepare the journal entry to record Tamas Company's Issuance of 5,600 shares of $100 par value, 8% cumulative preferred stock for $102 cash per share. 2. Assuming the facts in part 1, if Tamas declares a year end cash dividend, what is the amount of dividend paid to preferred shareholders? (Assume no dividends in arrears.) nts Complete this question by entering your answers in the tabs below. Skipped eBook Required 1 Required 2 Prepare the journal entry to record Tamas Company's issuance of 5,600 shares of $100 par value, 8% cumulative preferred stock for $102 cash per share. Print rences View transaction fiat Journal entry worksheet < А > Record the issue of $100 par value preferred stock for $102 cash per share. Note: Enter debits before credits Transaction General Journal Debit Credit 1

Answer 1

1)

transaction	general journal	debit	credit
1	cash	$571200
	preferred stock		$56000
	paid in capital in excess of par value		$11200

the cash account is an asset account which should be debited when it increases.the cash recieved is $571200 ($102*5600). preferred stock is an equity account and it should be credited when it increases.the amount to preffered stock is $56000 (5600*$100).paid in capital in excess of par value is also a equity account which should be credited when it increases.tha amount o paid in capital in excess of par value is $11200 (($102-$100)*5600).

2)

par value per preffered share	dividend rate	dividend per preffered share	numbers of preffered share	prefferd dividend
$100	8%	$8	5600	$44800

given

par value per preffered share is $100 and dividend rate is 8%

dividend per preffered share=$100*8%=$8

preffered dividend=dividend per preffered share*numbers of preffered share

numbers of preffered share=5600 shares

preffered dividend=$8*5600=$44800