Par and No-Par, Common and Preferred Stock

1. Prepare general journal entries for these transactions, identifying each by letter.

If an amount box does not require an entry, leave it blank.

2. Assume that stock transactions a, b and c occurred in year 1. The amount available for dividends at the end of year 1 is $26,000. Prepare the dividend allocation between the preferred and common shares in total and per share for year 1. If required, round per share amounts to two decimal places.

Hernandez Company had the following stock transactions during its first 5 years of operations:

(a)	Issued 25,000 shares of $1 par common stock for $25,000 cash.
(b)	Issued 20,000 shares of $1 par common stock for $22,000 cash.
(c)	Issued 2,000 shares of $50 par, 8% preferred stock for $100,000 cash.
(d)	Issued 1,000 shares of $50 par, 8% preferred stock for $51,500 cash.
(e)	Issued 2,500 shares of no-par common stock for $11,875 cash.
(f)	Issued 1,500 shares of no-par, $7 preferred stock for $72,000 cash.

1. Prepare general journal entries for these transactions, identifying each by letter.

If an amount box does not require an entry, leave it blank.

Page:

	DATE	ACCOUNT TITLE	DOC. NO.	POST. REF.	DEBIT	CREDIT
1	a.						1
2							2
3							3
4	b.						4
5							5
6							6
7							7
8	c.						8
9							9
10							10
11	d.						11
12							12
13							13
14							14
15	e.						15
16							16
17							17
18	f.						18
19							19

2. Assume that stock transactions a, b and c occurred in year 1. The amount available for dividends at the end of year 1 is $26,000. Prepare the dividend allocation between the preferred and common shares in total and per share for year 1. If required, round per share amounts to two decimal places.

Hernandez Company
Dividend Allocation
Total amount available for dividends
Dividends to preferred stock:
2,000 shares
Amount available for common stock
Dividends per share:
Preferred stock
Common stock