Donahue Corporation is authorized by its charter from the state of Illinois to i
ID: 2491898 • Letter: D
Question
Donahue Corporation is authorized by its charter from the state of Illinois to issue 750 shares of preferred stock with a 7% dividend rate and a par value of $50 per share and 22,000 shares of common stock with a par value of $0.01 per share. On January 1, 2013, Donahue Corporation issues 250 shares of preferred stock at $55 per share and 11,700 shares of common stock at $13 per share.
Required:
Prepare the journal entry to record the issuance of the stock. For a compound transaction, if an amount box does not require an entry, leave it blank.
HidePrepare the journal entry to record the issuance of the stock. For a compound transaction, if an amount box does not require an entry, leave it blank.
Explanation / Answer
Journal entry
date
Accounts
debit
credit
Jan 1 ,2013
Cash
13,750
To Preferred stock
(250*50)
12,500
To paid in excess of par(250*5)
1,250
Cash
152,100
To Common stock
(11,700*.01
117
To Paid in excess of par(11,700*12.99)
151,983
date
Accounts
debit
credit
Jan 1 ,2013
Cash
13,750
To Preferred stock
(250*50)
12,500
To paid in excess of par(250*5)
1,250
Cash
152,100
To Common stock
(11,700*.01
117
To Paid in excess of par(11,700*12.99)
151,983
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