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Journalizing Common and Preferred Stock Dividend Transactions Shutterbug Cameras issued
Chapter 21, Problem 21-7(choose chapter or problem)
Journalizing Common and Preferred Stock Dividend Transactions
Shutterbug Cameras issued 8,000 shares of $80 par, preferred 7% stock and 35,000 shares of $25 par common stock.
Instructions In your working papers:
1. Record the following transactions on general journal page 14.
2. Post the transactions to the general ledger accounts provided in your working papers. Net income was $296,490.
| Date | Transactions |
| Oct. 15 | The board of directors declared an annual cash dividend on the preferred 7% stock, payable on December 1, Memorandum 407. |
| Nov. 5 | Declared an annual cash dividend of $1.25 on 35,000 shares of common stock, payable on December 17, Memorandum 415. |
| Dec. 1 | Paid the dividend declared on October 15, Check 1163. |
| 17 | Paid the dividend declared on November 5, Check 1201. |
Questions & Answers
QUESTION:
Journalizing Common and Preferred Stock Dividend Transactions
Shutterbug Cameras issued 8,000 shares of $80 par, preferred 7% stock and 35,000 shares of $25 par common stock.
Instructions In your working papers:
1. Record the following transactions on general journal page 14.
2. Post the transactions to the general ledger accounts provided in your working papers. Net income was $296,490.
| Date | Transactions |
| Oct. 15 | The board of directors declared an annual cash dividend on the preferred 7% stock, payable on December 1, Memorandum 407. |
| Nov. 5 | Declared an annual cash dividend of $1.25 on 35,000 shares of common stock, payable on December 17, Memorandum 415. |
| Dec. 1 | Paid the dividend declared on October 15, Check 1163. |
| 17 | Paid the dividend declared on November 5, Check 1201. |
Step 1 of 4
Preferred stock can be defined as the stock that is provided higher priority at the time of the dividend and asset distribution. Such stock does not represent ownership in the business entity.