Answer:
Dr cash $ 2,473,500.00
Cr preferred stock $ 2,425,000.00
Cr paid-in capital in excess of par-preferred stock $48,500
Dr cash $ 3,422,000.00
Cr preferred stock $ 2,900,000
Cr paid-in capital in excess of par-preferred stock $522,000
Explanation:
The issue of preferred shares on Feb 1 would result in cash proceeds of $ $2,473,500.00 i.e (48,500*$51)
The proceeds would be debited to cash while preferred stock account is credited with par amount of $ 2,425,000.00 (48,500*$50) and the remaining amount of $ 48,500.00 is credited to paid-in capital in excess of par-preferred stock.
The issue of preferred shares on July 1 would result in cash proceeds of $3,422,000.00 i.e (58,000*$59)
The proceeds would be debited to cash while preferred stock account is credited with par amount of $ 2,900,000.00 (58000*$50) and the remaining amount of $ 522,000.00 is credited to paid-in capital in excess of par-preferred stock
