Question

Sylvan Heights Company issues 106,000 shares of preferred stock for $46 per share. The stock has...

Sylvan Heights Company issues 106,000 shares of preferred stock for $46 per share. The stock has a fixed dividend rate of 6% and a par value of $9 per share. The company records the issuance with a debit to Cash for: _______Explain.

A) $4.88 million, a credit to Preferred Stock for $954,000, and a credit to Additional Paid-in Capital for 3.92 million.

B) $4.88 million and a credit to Preferred Stock for $4.88 million

Homework Answers

Answer #1

The answer would be “(A) $4.88 million, a credit to Preferred Stock for $954,000, and a credit to Additional Paid-in Capital for 3.92 million”.

The journal entry to record the issue of Preferred stock is as follows

Account Titles and Explanation

Debit

Credit

Cash A/c [106,000 shares x $46 per share]

4,876,000

    To Preferred Stock A/c [106,000 shares x $9 per share]

954,000

    To Additional Paid-in Capital – Preferred Stock A/c

[106,000 shares x ($46 - $9)]

3,922,000

[The journal entry passed to record the issue of Preferred stock]

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Columbia Clay, Inc. issues 2 million shares of preferred stock with a par value of $2...
Columbia Clay, Inc. issues 2 million shares of preferred stock with a par value of $2 at its market price of $26 per share. The issuance should be recorded with a debit to Cash for: Multiple Choice $52 million and a credit to Preferred Stock for $52 million. $4 million and a credit to Preferred Stock for $4 million. $52 million, a credit to Additional Paid-in Capital for $4 million, and a credit to Preferred Stock for $48 million. $52...
Oriole Company issues 68000 shares of $50 par value preferred stock for cash at $70 per...
Oriole Company issues 68000 shares of $50 par value preferred stock for cash at $70 per share. The entry to record the transaction will consist of a debit to Cash for $4760000 and a credit or credits to Preferred Stock for $3400000 and Paid-in Capital in Excess of Par Value—Preferred Stock for $1360000. Preferred Stock for $3400000 and Retained Earnings for $1360000. Paid-in Capital from Preferred Stock for $4760000. Preferred Stock for $4760000.
Hondo inc, issued 1500 shares of 50$ per value convertible preferred stock at 80$ a share....
Hondo inc, issued 1500 shares of 50$ per value convertible preferred stock at 80$ a share. Each preferred share may be converted to 6 shares of 10$ per common stock. The entry to record the conversion of all would include a a.) debit to Preferred stock for $120,000 b.) debit to Additional paid-in Capital on Preferred stock for $90,000 c.) credit to Common stock for $120,000 d.) credit to Additional paid-in capital on common stock for $30,000
Garb Inc. issues 5,000 shares of $100 par value preferred stock for cash at $130 per...
Garb Inc. issues 5,000 shares of $100 par value preferred stock for cash at $130 per share. a. Journalize the issuance of the preferred stock.
Larkspur, Inc. issues 7,600 shares of $108 par value preferred stock for cash at $116 per...
Larkspur, Inc. issues 7,600 shares of $108 par value preferred stock for cash at $116 per share. Journalize the issuance of the preferred stock. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit enter an account title enter a debit amount enter a credit amount enter an account title enter a...
Julep Inc. issued 50,000 shares of common stock, $1 par, for cash of $18 per share...
Julep Inc. issued 50,000 shares of common stock, $1 par, for cash of $18 per share on January 1, 2020. Julep Inc. also incurred $10,000 in stock issue costs, paid in cash. The entry to record the issuance would include: A. A credit to Paid-in Capital in Excess of Par—Common Stock for $850,000. B. A credit to Paid-in Capital in Excess of Par—Common Stock for $840,000. C. A debit to Stock Issuance Costs for $10,000. D. A debit to Stock...
Stockholders' Equity: 5.5% preferred stock, $50 par value, callable at $101 per share, 1200 shares authorized………………..…..…………………….…….………….…………..…………….……………………......
Stockholders' Equity: 5.5% preferred stock, $50 par value, callable at $101 per share, 1200 shares authorized………………..…..…………………….…….………….…………..…………….……………………... $40,000 Common Stock, $1.5 par value, 200000 shares authorized……………………….....………………………………………………..… 216,000 Additional paid-in capital:     Preferred Stock…………………………...…………………….……...………………………………………….. ######     Common Stock……………………………………………………….…………………..……….….………………….. ###### 318,000 Retained Earnings…………………………………………………...……...………………………………………………………….. 226,800     Total stockholders' equity $800,800 Questions: How many shares of preferred stock have been issued? What is the total annual dividend requirement on the outstanding preferred stock? How many shares of common stock have been isued? What is the...
On January 1, Hiro Corp. issues 1,000 no-par ordinary shares for €15 per share. The shares...
On January 1, Hiro Corp. issues 1,000 no-par ordinary shares for €15 per share. The shares have a stated value of €5 per share. When Hiro prepares the journal entry to record the issuance of the shares which of the following will be recorded? Select one: a. Debit Share Premium—Ordinary €15,000. b. Credit Share Premium—Ordinary €10,000 c. Debit Share Capital—Ordinary €5,000. d. Credit Share Capital—Ordinary €15,000.
Nelson Corporation issues 6,000 shares of $100 par preferred stock at a price of $112 per...
Nelson Corporation issues 6,000 shares of $100 par preferred stock at a price of $112 per share on December 31. A stock warrant is attached to each share of preferred stock that enables the holder to purchase one share of $10 par common stock for $25. Immediately after issuance, the preferred stock begins selling ex rights for $110 per share. The warrants (which expire in 30 days) also begin trading for $4 per warrant. Required: 1. Prepare the journal entry...
Lionworks, Inc. issues ,500 shares of$42 par common stock for $47 per share. The amount credited...
Lionworks, Inc. issues ,500 shares of$42 par common stock for $47 per share. The amount credited to paid?in capital in excess of par? is: A. $164,500. B. ?$0. C. $147,000. D. $17,500. Kramer and Associates has the following account balances listed in alphabetical? order: Accumulated? Depreciation, $23,000?; Accounts? Payable, $10,500?, Accounts? Receivable, $9,000?; Cash, $2,000?; Equipment, $44,000?, Land, $21,000?, Mortgage? Payable, $50,000?; Prepaid? Insurance, $9,500?; Supplies, $1,000?; Unearned? Revenue, $6,000?; Wages? payable, $2,000. Kramer and? Associates' long?term assets? are: A....