Question

complete this question by entering your answers in the tabs below. prepare the journal entry to record tamas companys issuance of 6,500 shares of $100 par value, 9% cumulative preferred stock for $105 cash per share. journal entry worksheet record the issuance of 6,500 shares of $100 par value, 9% cumulative preferred stock for $105 cash per share. note: enter debits before credits.

Explanation:

Step1: Calculate cash received

Cash received = Number of shares × Issue price per share
Cash received = \(6500\times105 = 682500\)

Step2: Calculate preferred stock amount (at par)

Preferred stock amount (at par) = Number of shares × Par value per share
Preferred stock amount (at par) = \(6500\times100=650000\)

Step3: Calculate paid - in capital in excess of par - preferred stock

Paid - in capital in excess of par - preferred stock=Cash received - Preferred stock amount (at par)
Paid - in capital in excess of par - preferred stock=\(682500 - 650000=32500\)

Step4: Record the journal entry

Debit Cash (asset account increases) for \(682500\). Credit Preferred Stock (equity account increases) for \(650000\) and Credit Paid - in Capital in Excess of Par - Preferred Stock (equity account increases) for \(32500\)

Answer:

Transaction	General Journal	Debit	Credit
	Preferred Stock		\(650000\)
	Paid - in Capital in Excess of Par - Preferred Stock		\(32500\)