Toofles Company, a publicly traded entity, issued nonredeemable preferred stock on January 1, 2018, Toofles issued 1,000

Question:

Toofles Company, a publicly traded entity, issued nonredeemable preferred stock on January 1, 2018, Toofles issued 1,000 shares of $100 par value shares for $82,425. On January 1, 2015. the market rate or interest for preferred stock with the same characteristics was 6%. The preferred shares will not pay any dividends in 2015 or 2016 In 2017, they will pay 1% of par In 2018, they will pay 3% of par. In 2019 and thereafter, the shares will pay 6% of par.
Management would like to know how to account for these shares both at issuance and thereafter. Prepare a memo to the file using the Codification for support. Include any relevant journal entries. Assume that dividend payments occur at the end of the year.

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,...

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