a. JKL, Inc. began 2020 with 38,800 shares of $10 par common stock that were initially issued for $17.50 per share. These shares have been recorded.

b. There is one issue of non-cumulative 6% $500 par preferred stock. There are 3,616 shares issued and outstanding and the dividend was declared during 2019, payable January 15 2021, to holders of record December 31, 2020. These shares (but not the dividend associated with the shares) have already been recorded.

c. On May 1, 2020, the company sold an additional 750 bonds with warrants attached. The bonds, which mature in 2035, had a face value of $1,000 each, with 5% annual rate interest coupon interest due June 1 and December 1. Each bond carries 5 warrants to buy one share of the common stock of the company at $35.00 per share one warrant +$35 buys one share.) The bonds were sold to a private investor at 102, plus accrued interest. By comparison to other similar securities, the company has determined that the day after the sale the fair value of the bonds without the warrants was 98, and that the warrants would be expected to trade at $3.00. On December 31, 2020, 750 warrants (with the appropriate amount of cash) were tendered to the company in exchange for common stock. The average price of the common stock during 2020 was $19 per share.

d. On September 1, 2020, the company purchased 5,000 shares of its common stock for $22.50 per share.

ENTRIES NEEDED FOR C AND D

A)

Date	General Journal	Debit	Credit
2020	Cash (38,800 shares * 17.50)	$ 679,000
	Share Capital (38,800 shares * 10)		$ 388,000
	Additional Paid-in capital (38,800 shares * 7.50)		$ 291,000
	(To record the issue of shares at a premium)

.

As other issued journals are already passed so only the dividend declaration journal was asked.

B. Dividend declared

Date	General Journal	Debit	Credit
31 Dec	Dividends Declared / Retained earnings	$ 108,480
	Dividends Payable		$ 108,480
	(To record declaration of dividends to preferred shareholders)

Dividend payable = Outstanding preferred dividend at par * Rate of preferred dividend.

= 3,616 * 500 * 6 / 100

= $ 108,480

So, the dividends payable to preferred shareholders is $ 108,480