QUESTION 1 (11 marks)

The following is the stockholders equity section of the balance sheet of Delta-France Corporation as of January 1, 2021:

Paid-in capital:

Preferred stock, 6%, cumulative $75 par, 40,000 shares authorized,

6,500 shares issued and outstanding.......................................... $ 487,500

Common stock, $5 par, 100,000,000 shares authorized, 8,500,000

shares issued and outstanding.................................................... 42,500,000

Paid-in capital in excess of par-preferred stock....................................... 58,500

Paid-in capital in excess of par-common stock....................................... 5,000,000

Total Paid-in Capital................................................................................ $ 48,046,000

Retained earnings................................................................................... 4,467,200

Total stockholders equity........................................................................ $ 52,513,200

Delta-France Corporation reported the following transactions during the year, 2021:

May. 1 Declared cash dividend for 6% cumulative preferred stock and a $0.10 per share of cash dividend to the outstanding common stock. (3 marks)

May. 30 Paid the cash dividend declared on May 1. (3 marks)

Oct. 19 Declared a 2% stock dividend on the common stock outstanding (the market value of the stock to be issued is $20). (3 marks)

Nov. 2 Issued stock certificates to shareholders for the 2% stock dividend declared on October 19. (2 marks)

Required

Prepare journal entry to record the above transactions. (Explanation is not required)