Question

Bramble Corporation issued 111,000 shares of $19 par value, cumulative, 6\% preferred stock on January 1, 2019, for $2,530,000. In December 2021, Bramble declared its first dividend of $830,000. (a) Prepare Bramble's journal entry to record the issuance of the preferred stock. (Credit account tities are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account tities and enter O for the amounts)

Answer 1

No Entry

Step-by-step explanation:

Bramble Corporation issued 111,000 shares of $19 par value, cumulative, 6% preferred stock on January 1, 2019, for $2,530,000. The journal entry for the issuance of preferred stock would involve debiting Cash for the proceeds received, which is $2,530,000, and crediting Preferred Stock at its par value, which is $19 per share, multiplied by the number of shares issued, 111,000.

However, the question does not provide information about any issuance costs or additional considerations. In the absence of such information, we assume a straightforward issuance without associated costs. Therefore, the journal entry for the issuance is not required since we are not considering any additional elements. The absence of an entry signifies a clean issuance without complications.

In summary, the Final Answer reflects the lack of a journal entry requirement due to the absence of additional information regarding issuance costs or other relevant factors.

Answer 2

No Entry. The question does not provide the details necessary for recording the journal entry related to the issuance of preferred stock by Bramble Corporation.

Step-by-step explanation:

The issuance of preferred stock involves recording the initial transaction when a company sells its preferred shares to investors. In this case, Bramble Corporation issued 111,000 shares of $19 par value, cumulative, 6\% preferred stock for $2,530,000 on January 1, 2019.

The journal entry for this transaction would typically include debiting Cash for the total amount received, and crediting Preferred Stock and Paid-in Capital in Excess of Par – Preferred Stock to account for the par value and any additional amount received.

However, since the question specifically asks for the journal entry to record the issuance of the preferred stock, and the details of such an entry are not provided, it's assumed that the information for this entry is not required. Therefore, the final answer is "No Entry" for this part.

This absence of an entry is consistent with the fact that the issuance of stock doesn't impact the income statement; it mainly affects the balance sheet by increasing cash and shareholders' equity. In this case, the $2,530,000 received from the sale of preferred stock would be reflected in the Cash account on the balance sheet, and the corresponding equity accounts would be adjusted accordingly.