Question
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.
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 46,000 preferred shares and 36,000 common shares. |
Recently the following transactions have taken place. |
a. | NGS issues 800 preferred shares for $13 a share. |
b. | NGS repurchases 800 common shares for $12 a share. |
c. | On November 12, the board of directors declares a $0.50 cash dividend on each outstanding preferred share. |
d. | The dividend is paid December 20. 1. Prepare the journal entries needed for each of the transactions. 2. Show the overall effect of each transaction on the assets, liabilities, and shareholders equity of the company. (Use + for increase, for decrease.) |
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