Donahue Corporation is authorized by its charter from the state of Illinois to issue 750 shares of

Question:

Donahue Corporation is authorized by its charter from the state of Illinois to issue 750 shares of preferred stock with a 7 percent dividend rate and a par value of $50 per share and 22,000 shares of common stock with a par value of $0.01 per share. On January 1, 2009, Donahue Corporation issues 250 shares of preferred stock at $55 per share and 12,000 shares of common stock at $13 per share.

Required:

Record the necessary journal entry for January 1, 2009.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...