Question

Problem 5 : P13-41A

Background:

D-Mobile Wireless needed additional capital to expand, so the business incorporated. The charter from the state of Georgia authorizes D-Mobile to issue 50,000 shares of 8%, $50 par value cumulative preferred stock and 160,000 shares of $4 par value common stock. D-Mobile entered into the transactions listed in the Transactions section below during October 2018.

Assignment:

1) Using the General Journal tab, click Add Transaction to journalize each transaction. Click Post Transaction once you complete the entry, then repeat these steps for each transaction.

Transactions:

10/02/2018-- Issued 19,000 shares of common stock for a building with a market value of $240,000.

10/06/2018-- Issued 600 shares of preferred stock for $140 per share.

10/09/2018-- Issued 11,000 shares of common stock for cash of $55,000.

10/10/2018-- Declared a $19,000 cash dividend for stockholders of record on October 20. Use a separate dividends payable account for preferred and common stock.

10/25/2018-- Paid the cash dividend.

Account #	Description	Type
10100	Cash	Current Asset
10150	Equity Investments	Current Asset
10400	Accounts Receivable	Current Asset
11000	Land	Property, Plant, and Equipment
11150	Building	Property, Plant, and Equipment
20100	Accounts Payable	Current Liability
20250	Salaries Payable	Current Liability
20650	Dividends Payable - Preferred	Current Liability
20700	Dividends Payable - Common	Current Liability
30400	Preferred Stock - $50 Par Value	Stockholders' Equity
30450	Paid-In Capital in Excess of Par - Preferred	Stockholders' Equity
30500	Common Stock - $4 Par Value	Stockholders' Equity
30550	Paid-In Capital in Excess of Par - Common	Stockholders' Equity
30700	Retained Earnings	Stockholders' Equity
30850	Cash Dividends	Dividends - Common
40100	Sales Revenue	Sales Revenue
50100	Cost of Goods Sold	Cost of Goods Sold
50350	Salaries Expense	Operating Expense

Answer 1

Date	Journal entries	Dr.($)	Cr.($)
10-02-2018	building	240000
	To common stock (19000 shares * $4)		76000
	To additional paid-in capital common stock		164000
	(being issuance of common share in exchange for building)
10-06-2018	cash (600 shares * $140)	84000
	To preferred stock (600 shares *$50)		30000
	To additional paid-in capital preferred stock		54000
	being issuance of preferred stock for cash)
10-09-2018	cash	55000
	To common stock (11000 shares *$4)		44000
	To additional paid-in capital common stock		11000
	(being issuance of common stock for cash)
10-10-2018	retained earnings	19000
	To cash dividend payable - preferred stock		2400
	To cash dividend payable - common stock (balance difference)		16600
	(being dividend declared and recorded)
10/25/2018	cash dividend payable - preferred stock	2400
	cash dividend payable - common stock	16600
	To cash		19000
	(being dividends paid)

calculation of preferred dividend

preferred share issued	600
par value	50
rate (%)	8
preferred dividend	2400