Answer:
Cash 30,000
Common stock 20,000
Additional paid-in 10,000
Treasury Stock 7,000
Cash 7,000
dividends 21,000
dividends payable 21,000
dividends payable 21,000
cash 21,000
dividends 124,500 debit
dividends payable 124,500 credit
dividends payable 124,500 debit
cash 124,500 credit
Explanation:
<u>Feb 1st</u>
5,000 x $4 = 20,000
Cash proceeds 30,000
addtional : 10,000
<u>March 20th</u>
1,000 shares x $7 per share = 7,000
<u>October 1st:</u>
300,000 preferred stock x 7% = 21,000 dividends
As we aren't paying right away we have a liaiblity.
Once are payed we write-off and post the cash outlay
<u>November 1st:</u>
common stock outstanding:
250,000 + 5,000 new shares - 6,000 trasury stock = 249,000
dividends payable:
249,000 shares x $0.5 per share = $124,500
<u>December 1st</u>
we write off the payable and post the cash outlay
