Answer:
The Journal entries are as follows:
(a) On Feb 1,
Cash A/c (5,000 × $15) Dr. $75,000
To common stock $75,000
(To record the issue of shares)
(b) On May 15,
Cash A/c (500 × $12) Dr. $6,000
To Preferred stock (500 × $10) $5,000
To Paid in capital in excess of par $1,000
(To record the issue of preferred shares)
(c) On Oct 1,
Dividend Expense A/c (5,500 × $0.75) Dr. $4,125
To Dividend Payable $4,125
(To record the declaration of dividend)
(d) On Oct 15,
No Journal entry would be passed.
(e) On Oct 31,
Dividend Payable A/c Dr. $4,125
To cash $4,125
(To record the payment of dividend)
