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Nicole has been financing Nicole’s Getaway Spa (NGS) using equity financing. Currently NGS has authorized 100,000 no-par preferred shares and 200,000 $2 par common shares. Outstanding shares include 51,000 preferred shares and 41,000 common shares.

Required:
1.

Prepare the journal entries needed for each of the transactions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
Recently the following transactions have taken place.
a. NGS issues 1,050 preferred shares for $11 a share.
b. NGS repurchases 1,050 common shares for $10 a share.
c.

On November 12, the board of directors declares a $0.20 cash dividend on each outstanding preferred share.
d.

The dividend is paid December 20.

1

Record the issuance of 1,050 shares of preferred stock with no par value for a price of $11 per share.

2

Record the purchase of 1,050 previously issued common shares for a price of $10 per share.

3

Record the declaration of a $0.20 cash dividend on the shares of preferred stock outstanding.

4

Record the payment of the cash dividend to the preferred shareholders.

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Jamar Ferry
Jamar FerryLv2
29 Sep 2019

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Related questions

Radko Inc. had the following transactions related to its common and preferred shares:

January 15 Issued 350,000 no par common shares for $15 per share. Issued 5,000 $20 stated value preferred shares at $23 per share.
November 29 Repurchased and cancelled 30,000 common shares at $21 per share.

Required:

Prepare the journal entries for these transactions. For a compound transaction, for those boxes in which no entry is required, leave the box blank.

Jan. 15 Cash
Common Shares
Preferred Shares
Contributed Surplus-Preferred Shares
(Record sale of preferred and common shares)
Nov. 29 Common Shares
Retained Earnings
Cash
(Record purchase and cancellation of common shares)

Complete each question record transactions


Question 1

Hernandez Company had the following stock transactions duringthe year:

  1. Issued 25,000 shares of $1 par common stock for $25,000.

  2. Issued 20,000 shares of $1 par common stock for $22,000cash.

  3. Issued 22,000 shares of $1 par common stock for $21,000cash.

  4. Issued 2,000 shares of $50 par, 8% preferred stock for $100,000cash.

  5. Issued 1,000 shares of $50 par, 8% preferred stock for $49,000cash.

  6. Issued 1,000 shares of $50 par 8% preferred stock for$51,500

  7. Issued 2,500 shares of no-par common stock for $11,875 cash

  8. Issued 1,500 shares of no par 7% preferred stock for $72,000cash.


Question 2

Kris Kraft Stores had the following stock transactions duringthe year.

  1. Issued 4,000 shares of no par common stock with a stated valueof $10 per share for $40,000 cash.

  2. Issued 6,000 shares of no par common stock with a stated valueof $8 per share for $50,000 cash.

  3. Issued 5,000 shares of no par 6% preferred stock with a statedvalue of $15 per share for $75,000 cash.

  4. Issued 3,000 shares of no par 6% preferred stock with a statedvalue of $20 per share for $58,000 cash.

  5. Issued 10,000 shares of $8 par common stock with a $9 fairmarket value for a building with an uncertain fair marketvalue.

  6. Issued 10,000 shares of $5 common stock for land with a fairmarket value of $50,000.

  7. Issued 8,000 shares of $50 par, 8% preferred stock for land witha fair market value of $405,000.


Question 3

During the year ended December 21, 2013, Smith Company completedthe following transactions:

  1. 04/15 Declared a semiannual dividend of $0.80 per share onpreferred stock and $0.05 per share on common stock to shareholdersof record on 05/05, payable on 05/10. Currently, 4,000shares of $100 par preferred stock and 50,000 shares of $1 parcommon stock are outstanding.

  2. 05/05 Record date of record entry.

  3. 05/10 Paid cash dividends.

  4. 10/15 Declared semiannual dividend of $0.80 per share onpreferred stock and $0.50 per share on common stock to shareholdersof record on November 5, payable on November 20.

  5. 11/5 Record date of record entry.

  6. 11/20 Paid cash dividends

  7. 11/22 Declared a 10% stock dividend to shareholders of record onDecember 8, distributable on December 16. Market valueof the common stock was estimated to be $8.

  8. 12/08 Record date of record entry.

  9. 12/16 issued certificated for common stock dividend.

  10. 12/20 Board of directors declared a two for one common stocksplit.





At the end of 2017, Jeffco Inc. had the following equity accounts and balances:

Common shares, no par (175,000 shares issued and outstanding) $1,926,400
Retained earnings 310,000

During 2018, Jeffco engaged in the following transactions involving its equity accounts:

Issued 8,000 common shares for $35 per share.

Issued 1,000 shares of 9%, $120 stated value preferred shares at $125 per share.

Declared and paid cash dividends of $15,000.

Repurchased and cancelled 500 common shares for $52 per share.

Required:

1. Prepare the journal entries for a through d. For a compound transaction, for those boxes in which no entry is required, leave the box blank.

a. 2018 Cash
Common Shares
(Record issue of common shares)
b. Cash
Preferred Shares
Contributed Surplus-Preferred Shares
(Record issue of preferred shares)
c. Retained Earnings (or Dividends)
Cash
(Record declaration and payment of dividends)
d. Retained Earnings
Common Shares
Cash
(Record repurchase of common shares)

2. Assume that 2018 net income was $89,600. Prepare a partial statement of financial position showing only the shareholders' equity section at December 31, 2018.

Jeffco, Inc.
Statement of Financial Position (Partial)
December 31, 2018
Shareholders' equity:
Preferred shares, 9%, $120 stated value $
Common shares, no par
Contributed surplus:
Preferred shares
Total capital stock
Retained earnings
Total shareholders' equity $

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