Question

Major League Apparel has two classes of stock authorized: 5%, $10 par preferred, and $1 par value common. The following transactions affect stockholders’ equity during 2021, its first year of operations.

Required information [The following information applies to the questions displayed below.] Major League Apparel has two classes of stock authorized: 5%, $10 par preferred, and $1 par value common. The following transactions affect stockholders' equity during 2021, its first year of operations: January 2 Issue 100,000 shares of common stock for $63 per share. February 14 Issue 53,000 shares of preferred stock for $11 per share. May 8Purchase 10,000 shares of its own common stock for $53 per share. May 31 Resell 5,000 shares of treasury stock for $58 per share. December 1 Declare a cash dividend on its common stock of $0.65 per share and a $26,500 (5% of par value) cash dividend on its preferred stock payable to all stockholders of record on December 15. The dividend is payable on December 30. (Hint: Dividends are not paid on treasury stock.) December 30 Pay the cash dividends declared on December 1.

Have a few following journal transactions - please show work and explain!!

FEB 14 - Record the issuance of 53,000 shares of preferred stock for $11 per share.

MAY 31 - Record the resell of 5,000 shares of treasury stock for $58 per share.

DEC 1 - Record the declaration of a cash dividend on its common stock of $0.65 per share and a $26,500 (5% of par value) cash dividend on its preferred stock payable to all stockholders. The dividend is payable on December 30. (Hint: Dividends are not paid on treasury stock.)

Record the entry on December 15.

Record the cash dividends declared on December 1.

Answer 1

journal debit date account titles and explanation credit calculation 2-Jan $6,300,000 cash common stock paid in capital in excess of par-common stock (to record issue of common stock) $100,000 $6,200,000 100,000 * $63 100,000 * $1 100,00 * $62 14-Feb $583,000 cash preferred stock $530,000 $53,000 53,000 * $11 53,000* $10 53,000 * $1 (to record issue of preferred stock) 8-May $530,000 10,000 * $53 treasury stock cash (to record purchase of treasury stock) $530,000 $290,000 31-May cash treasury stock paid in capital-treasury stock (to record sale of treasury stock) $265,000 $25,000 5,000 * $58 5,000* $53 5,000 * $5 1-Dec $61,750 (100,000 - 10,000 + 5,000) * $0.65 dividends common dividends payable |(to record declaration of common dividends) $61,750 1-Dec $26,500 $530,000 * 5% dividends preferred dividends payable (to record declaration of preferred dividends) $26,500 15-Dec no entry required 31-Dec $61,750 common dividends payable cash (to record payment of common dividends) $61,750 31-Dec $26,500 preferred dividends payable (to record payment of preferred dividends) $26,500