Question

1. Record the journal entries for the following facts:
   1. 500 shares of common stock outstanding.
   2. 600 shares of $100 six percent cumulative preferred stock have been outstanding since 2016.
   3. 800 shares of $100 seven percent non-cumulative preferred stock have been outstanding since 2010.
   4. The cumulative preferred stock is subordinate to the non-cumulative preferred stock.
   5. The common shareholders received a dividend in 2017.
   6. Dividends in 2018 were $5,000.
   7. Dividends declared by the board of directors were $16,000 in 2019.
   8. The dividends were paid twelve days after the board of directors declared them.

All information provided

Answer 1

Number	Date	Particulars		Debit ($)	Credit ($)
a.		Retained Earnings	Dr.
		Common stock account (500 Shares)
b.		Retained Earnings	Dr.	60,000
		6% cumulative preferred stock account (600*100)			60,000
c.		Retained Earnings	Dr.	80,000
		7% non-cumulative preferred stock (800*100)			80,000
d.		No journal entry as it is related with disclosure
e.	2017	Share holders account	Dr.
		Cash/bank account
f.	2018	Accrued Dividend account	Dr.	5,000
		Share holders account			5,000
g.	2019	Retained earnings account	Dr.	16,000
		Accrued Dividend account			16,000
h.		Accrued Dividend account	Dr.	16,000
		Share holders account			16,000
		Share holders account	Dr.	16,000
		Cash/bank account			16,000