Sources of equity, journalizing stock issuance, and calculating book value per share
This problem continues the Draper Consulting, Inc., situation. After issuing the bonds in Chapter 11, Draper decides to raise additional capital for the planned business expansion by issuing 20,000 additional no par common shares for $40,000 and by issuing 3,000, 6%, $80 par preferred shares at $100 per share.
Requirements
1. Assuming total stockholders’ equity is $18,165 and includes 100 shares of common stock and 0 shares of preferred stock issued and outstanding immediately before the previously described transactions, journalize the entry related to the issuances of both common and preferred shares.
2. Calculate book value per preferred and book value per common share after the issuance.
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