On January 1, 2022, Gato Company issued 1,000 shares of $80 par callable preferred shares for $200,000.

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On January 1, 2022, Gato Company issued 1,000 shares of $80 par callable preferred shares for $200,000. Gato can call these preferred shares on January 1, 2023, for $200 per share. On June 1, 2023, Gato calls the shares.


Required

a. What is the journal entry to record the issuance of the preferred shares?

b. What is the journal entry when Gato calls the preferred shares?

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Intermediate Accounting

ISBN: 9780136946694

3rd Edition

Authors: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella

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