Question

5. Want you to record the declaration; 6. record entry; and 7. record cash. Should 5 or 6 be no journal entry? I am confused as to why there are 2 steps here.

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 2021, its first year of operations: January 2 Issue 110,000 shares of common stock for $54 per share. February 14 Issue 44,000 shares of preferred stock for $12 per share. May Purchase 11,000 shares of its own common stock for $44 per share. May 31 Resell 5,500 shares of treasury stock for $49 per share. December 1 Declare a cash dividend on its common stock of $0.45 per share and a $26,400 (68 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.) 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.) View transaction list View journal entry worksheet Credit No 1 Debit 5,940,000 1 Date General Journal January 02, 2021 Cash Common Stock Additional Paid-In Capital 110.000 5.830,000 1 2 528,000 February 14, 2021 Cash Preferred Stock Additional Paid-In Capital 440,000 88,000 23 May 08, 2021 484.000 Treasury Stock Cash 484,000 May 31, 2021 269,500 Cash Treasury Stock Additional Paid-In Capital 242,000 27,500 5 73,425 December 01, 2021 Dividends Dividends Payable 73 425 December 15, 2021 Dividends Dividends Payable 7 73,425 December 30, 2021 Dividends Cash 73.425

Answer 1

Journal entries:

Date	Account title and explanation	Debit	Credit
Jan 02,2021	Cash [110,000 x $54]	$5,940,000
	Common stock [110,000 x $1 par]		$110,000
	Additional Paid-in capital		$5,830,000
	[Issuance of common stock]
Feb 14,2021	Cash [44,000 x $12]	$528,000
	Preferred stock [44,000 x $10 par]		$440,000
	Additional paid-in capital		$88,000
	[Issuance of preferred stock]
May 8,2021	Treasury stock [11,000 x $44]	$484,000
	Cash		$484,000
	[Repurchas of own shares]
May 31,2021	Cash [5,500 x $49]	$269,500
	Treasury stock [5,500 x $44 cost]		$242,000
	Additional paid-in capital		$27,500
	[Sale of treasury stock]
Dec 01,2021	Dividends	$73,425
	Dividends payable-common stock [104,500 x $0.45]		$47,025
	Dividends payable-preferred stock		$26,400
	[Declaration of cash dividends]
Dec 15,2012	No Entry on record date
Dec 30,2021	Dividends payable-common stock	$47,025
	Dividends payable-preferred stock	$26,400
	Cash		$73,425
	[Payment of cash dividends]

Calculations:

Outstanding common shares
Jan.2	110,000
Treasury stock	-11,000
Sale of treasury stock	5,500
Balance	104,500

No entry on dividends record date