Recording the Issuance of Common and Preferred Shares

Donahue Corporation is authorized by its charter from the state of Illinois to issue 750 preferred shares with a 7% dividend rate and a stated value of $50 per share and 22,000 common shares. On January 1, 2018, Donahue Corporation issues 250 preferred shares at $58 per share and 13,000 common shares at $13 per share.

Required: Prepare the journal entry to record the issuance of the shares. For a compound transaction, for those boxes in which no entry is required, leave the box blank.

Recording the Issuance of Common and Preferred Shares Donahue Corporation is authorized by its charter from the state of Illinois to issue 750 preferred shares with a 7% dividend rate and a stated value of $50 per share and 22,000 common shares. On January 1, 2018, Donahue Corporation issues 250 preferred shares at $58 per share and 13,000 common shares at $13 per share. Required: Prepare the journal entry to record the issuance of the shares. For a compound transaction, for those boxes in which no entry is required, leave the box blank. Cash 158,050 X 2018 Jan. 1 Preferred Shares 2,000 X Contributed Surplus-Preferred Shares Common Shares 111 X (Record sale of preferred and common shares) Feedback Check My Work f shareholders' equity When companies sell common or preferred shares to raise capital, the resulting ownership claims are recorded in the share capital section Learning Objective 2