Radko Inc. had the following transactions related to its common and preferred sh

Question

Radko Inc. had the following transactions related to its common and preferred shares: January 15 Issued 350,000 no par common shares for $15 per share. Issued 5,000 $20 stated value preferred shares at $23 per share. November 29 Repurchased and cancelled 30,000 common shares at $21 per share. Required: Prepare the journal entries for these transactions. For a compound transaction, for those boxes in which no entry is required, leave the box blank. Jan. 15 Common Shares Preferred Shares Contributed Surplus-Preferred Shares (Record sale of preferred and common shares)

Explanation / Answer

Date Particulars Debit Credit January 15 Cash [(350,000*15)+(5,000*23)] 5,365,000 Common shares (350,000*15) 5,250,000 Preferred shares (5,000*20) 100,000 Contributed surplus-Preferred shares (5,000*3) 15,000 Date Particulars Debit Credit November 29 Common shares (30,000*15) 450,000 Retained earnings [30,000*(21-15)] 180,000 Cash (30,000*21) 630,000

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