Italian Stallion has the following transactions during the year related to stock

Question

Italian Stallion has the following transactions during the year related to stockholders' equity. February 1 Issues 4,700 shares of no-par common stock for $16 per share. May 15 Issues 300 shares of S10 par value preferred stock for $13 per share. October 1 Declares a cash dividend of $0.60 per share to all stockholders of record (both common and preferred) on October 15. October 15 Date of record. October 31 Pays the cash dividend declared on October 1. Record each of these transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Explanation / Answer

Italian Stallion Journal Entry Date Account title DR $ Cr $ Feb 1. Cash                            75,200 Common Stock                            75,200 (issue of no-par stock 4700 nos) May 15. Cash                              3,900 Preferred Stock Additional paid in capital in excess of Par-Preferred Stck                              3,000                                  900 (issue of 300 pref stock at premium) Oct 15. Common Stock Dividend Payable                              2,820 Preferred Stock Dividend Payable                                  180 Retained Earning                              3,000 (recorded common and preferred stock dividend declared) Oct 31. Cash                              3,000 Common Stock Dividend Payable                              2,820 Preferred Stock Dividend Payable                                  180 (declared dividends paid)

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