Question

Italian Stallion has the following transactions during the year related to stockholders' equity.

February 1 Issues 4,100 shares of no-par common stock for $16 per share.
May 15 Issues 200 shares of $10 par value, 3% preferred stock for $13 per share.
October 1 Declares a cash dividend of $0.30 per share to all stockholders of record (both common and pre
October 15 October 15 Date of record.
October 31 Pays the cash dividend declared on October 1.
Required: Record each of these transactions.

Answer 1

February 1 Issues 4,100 shares of no-par common stock for $16 per share.

Dr Cash 65,600

Cr Common stock 65,600

May 15 Issues 200 shares of $10 par value, 3% preferred stock for $13 per share.

Dr Cash 2,600

Cr Preferred stock 2,000

Cr Additional paid in capital - preferred stock 600

October 1 Declares a cash dividend of $0.30 per share to all stockholders of record

Dr Retained earnings 1,290

Cr Preferred stock dividends payable 60

Cr Common stock dividends payable 1,230

October 15 October 15 Date of record.

No journal entry required.

October 31 Pays the cash dividend declared on October 1.

Dr Preferred stock dividends payable 60

Dr Common stock dividends payable 1,230

Cr Cash 1,290