CC11-1 Accounting for Equity Financing [LO 11-1, LO 11-2, LO 11-3, LO 11-4, LO 11-5] [The following information applies to the questions displayed below.] Nicole has been financing Nicoles Getaway Spa (NGS) using equity financing. Currently NGS has authorized 100,000 no-par preferred shares and 200,000 $2 par common shares. Outstanding shares include 57,000 preferred shares and 47,000 common shares. Recently the following transactions have taken place. NGS issues 1,350 preferred shares for $11 a share. NGS repurchases 1,350 common shares for $10 a share. On November 12, the board of directors declares a $0.30 cash dividend on each outstanding preferred share. The dividend is paid December 20.

2 4 Record the issuance of 1,350 shares of preferred stock with no par value for a price of $11 per share. Note: Enter debits before credits Transaction General Journal Debit Credit Cash 14,850 Preferred Stock 14,850 Record entry Clear entry View general journal 4 Record the purchase of 1,350 previously issued common shares for a price of $10 per share. Note: Enter debits before credits. Transaction General Journal Debit Credit Cash 13,500 Record entry Clear entry View general journal 2 4 Record the declaration of a $0.30 cash dividend on the shares of preferred stock outstanding. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journal 2 4 Record the payment of the cash dividend to the preferred shareholders. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journal 3. Show the overall effect of each transaction on the assets, liabilities, and shareholders' equity of the company. (Use +for increase, for decrease, and NE for no effect.) Balance Sheet Transaction Assets Liabilities Stockholders' Equity b. C. d