Declaration of the annual dividend on the preferred shares


Zcom Inc. began a very lucrative consulting operation on April 1, 2010. They are authorized to issue 400,000 shares of $1.00 cumulative preferred shares. They are also authorized to issue 500,000 common shares.

a.April 1 : 8,000 of the common shares were issued for a total of $24,000 cash.

b.April 3 : 6,000 common shares were issued in exchange for land valued at $11,000. The shares were actively trading on this date at $2.00 per share.

c.April 16 : Gave the corporation's promoters 13,000 common shares for their services in organizing the corporation. The directors valued the services at $65,000.

d.April 19 : 12,000 of the preferred shares were issued for a total of $120,000 cash.

e.April 23 : Issued 14,000 preferred shares at $12.00 for cash.

f.April 30 : In addition to the declaration of the annual dividend on the preferred shares, dividends of $40,500 were declared on the common shares today.

Prepare journal entries for the above transactions, entering the transaction letter as the explanation. Also, enter dates in the format dd/mmm (ie. 15/Jan).

Request for Solution File

Ask an Expert for Answer!!
Accounting Basics: Declaration of the annual dividend on the preferred shares
Reference No:- TGS091515

Expected delivery within 24 Hours