Answer:
The Journal entries are as follows:
(i) On February 1,
Cash A/c (6,000 × $16) Dr. $96,000
To common stock $96,000
(To record the issue of shares)
(ii) On May 15,
Cash A/c (700 × $13) Dr. $9,100
To Preferred stock (700 × $10) $7,000
To paid in capital in excess of par $2,100
(To record the issue of preferred shares)
(iii) On October 1,
Dividend expense A/c (6,700 × $1.25) Dr. $8,375
To Dividend payable $8,375
(To record the declaration of dividend)
(iv) On October 15,
No journal entry.
(v) On October 31,
Dividend Payable A/c Dr. $8,375
To cash $8,375
(To record the payment of dividend)