Question

Delilah Corporation reports the following transactions for 2013:

Jan. 11 Sold 6,000 shares of $3.50, noncumulative, preferred shares for $75 per share.

Feb. 20 Sold 30,000 common shares for $11 per share.

Oct. 13 Declared a 10% stock dividend on the common shares. The current market price of the common shares is $14 per share. Sampson Corporation has 100,000 common shares outstanding on October 13.

Nov. 16 Distributed the stock dividend declared on October 13.

Dec. 16 Declared the annual dividend required on the preferred shares and a $0.50 per share dividend on the common shares. Sampson Corporation currently has 20,000 preferred shares outstanding.

Prepare journal entries for the above transactions

Answer 1

Date	Accounts title and Explanation	Debit	Credit
11-Jan-13	Cash	450000
	Preferred stock - Non cumulative (75 * 6000)		450000
	(To record issue of 6,000 shares of $3.50, noncumulative, preferred shares for $75 per share)
Feb-20	Cash	330000
	Common stock ( 11 * 30000 )		330000
	(To record issue of 30,000 common shares for $11 per share)
Oct-13	Retained Earnings	140000
	Common stock dividend distributable ( 14 * (100000*10%) )		140000
	(To record 10% stock dividend declared )
Nov-16	Common stock dividend distributable	140000
	Common stock		140000
	(to record stock dividend distribution )
Dec-16	Dividend	125000
	Dividend Payable - Common stock (100000 + 10000 ) * 0.50)		55000
	Dividend Payable - Preferred stock (20000 * 3.50 )		70000
	(To record Declared dividend on stock )