qs 13 - 11 (algo) preferred stock issuance and dividends lo c2\ncomplete this question by entering your…
qs 13 - 11 (algo) preferred stock issuance and dividends lo c2\ncomplete this question by entering your answers in the tabs below.\nrequired 1 required 2\nprepare the journal entry to record tamas company’s issuance of 5,400 shares of $100 par value, 6% cumulative preferred stock for $104 cash per share.\nview transaction list\njournal entry worksheet\na\nrecord the issuance of 5,400 shares of $100 par value, 6% cumulative preferred stock for $104 cash per share.\nnote: enter debits before credits.\ntransaction general journal debit credit
Answer
Explanation:
Step1: Calculate cash received
The company issued 5,400 shares at $104 per share. Cash received = Number of shares × Issue - price per share = 5400×104 = $561,600.
Step2: Calculate the par - value of preferred stock
The par - value of each share is $100 and 5,400 shares are issued. Par - value of preferred stock = Number of shares × Par - value per share = 5400×100 = $540,000.
Step3: Calculate the paid - in capital in excess of par
Paid - in capital in excess of par = Cash received−Par - value of preferred stock = 561600 - 540000=$21,600.
Step4: Record the journal entry
The company receives cash (debit), records the preferred stock at par value (credit), and records the excess amount over par as paid - in capital in excess of par on preferred stock (credit).
Answer:
| Transaction | General Journal | Debit | Credit |
|---|---|---|---|
| 1 | Cash | $561,600 | |
| Preferred Stock, $100 par value | $540,000 | ||
| Paid - in Capital in Excess of Par - Preferred Stock | $21,600 |