Answer and Explanation:
The journal entries are shown below:
On Mar 1
Cash (2,200 × $17) $37,400
To Common Stock (2,200 × $1) $2,200
To Paid in capital in excess of par - Common stock (2,200 × $16) $35,200
(Being the issuance of the common stock is recorded)
On April 1
Cash (150 × $32) $4,800
To Preferred stock (150 × $10) $1,500
To Paid in capital in excess of par - Preferred stock (150 × $22) $3,300
(Being the issuance of the preferred stock is recorded)
O Jun 1
Dividends $2,820
Dividends payable $2,820
(Being the dividends declared is recorded)
On June 30
Dividends payable $2,820
To Cash $2,820
(Being the dividends paid is recorded)
On Aug 1
Treasury stock (250 × $14) $3,500
To Cash $3,500
(Being the treasury stock is recorded)
On Oct 1
Cash (150 × $16) $2,400
To Treasury stock (150 × $14) $2,100
To Paid in capital in excess of par -Treasury stock (150 × $2) $300
(Being the reissue of treasury stock is recorded)
The computation of the dividend is shown below:
For common stock
= (2,200 + 2,200) × $0.60
= 4,400 × $0.60
= $2,640
For preferred stock
= (150 + 150) × $0.60
= $180
Total dividends is
= $2,640 +$180
= $2,820
