Required information

Skip to question

[The following information applies to the questions displayed below.] Homestead Oil Corp. was incorporated on January 1, 2019, and issued the following stock for cash:

• 800,000 shares of no-par common stock were authorized; 150,000 shares were issued on January 1, 2019, at $38 per share.
• 200,000 shares of $100 par value, 6.5% cumulative, preferred stock were authorized; 90,000 shares were issued on January 1, 2019, at $122 per share.
• Net income for the years ended December 31, 2019 and 2020 was $2,600,000 and $5,600,000, respectively.

• Prepare the journal entries to record each of the below transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

• The issuance of common stock and preferred stock on January 1, 2019.
• The declaration of dividends on December 28, 2020.
• The payment of dividends on February 12, 2021.
• No dividends were declared or paid during 2019. However, on December 28, 2020, the board of directors of Homestead declared dividends of $3,600,000, payable on February 12, 2021, to holders of record as of January 19, 2021.