Question 14

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Major League Apparel has two classes of stock authorized: 6%, $10 par preferred, and $1 par value common. The following transactions affect stockholders equity during 2018, its first year of operations:

January 2 Issue 110,000 shares of common stock for $67 per share.

February 14 Issue 57,000 shares of preferred stock for $12 per share.

May 8 Repurchase 11,000 shares of its own common stock for $57 per share.

May 31 Reissue 5,500 shares of treasury stock for $62 per share.

December 1 Declare a cash dividend on its common stock of $0.40 per share and a $34,200 (6% of par value) cash dividend on its preferred stock payable to all stockholders of record on December 15. The dividend is payable on December 30. (Hint: Dividends are not paid on treasury stock.)

December 30 Pay the cash dividends declared on December 1.

Required:

1. Record each of these transactions. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field.)

Issue 110,000 shares of common stock for $67 per share.

• Issue 57,000 shares of preferred stock for $12 per share.

• Repurchase 11,000 shares of its own common stock for $57 per share.

• Reissue 5,500 shares of treasury stock for $62 per share.

• Record the declaration of cash dividends.

• Record the entry on the date of record.

• Pay the cash dividends declared on December 1. Record the payment of cash dividends.