Question

How do you record this on your journal: Nov. 30 Summer issued 2,100 shares of $20 par, 6% preferred stock of $118,950.

Answer 1

Journal entry

? In the books of Summer

Date	Particulars	Dr. (in $)	Cr. (in $)
Nov. 30	Bank/Cash A/c Dr.	118,950
	To Additional Paid in Preferred Stock* (Balance)		76,950
	To 6% Preferred Stock (2100*20)		?42,000
	( Being Preferred Stock issued at Par)

*Note: ?Preferred Stock can be issued for more than the Par value, so additional shares will be issued for difference between Value recd. and Par Value.

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