Mod 7

Date

Accounts and Explanation

Debit

Credit

Oct. 2

Building

250,000

Common Stock ($2 per share × 19,000 shares)

38,000

Paid-In Capital in Excess of Par—Common ($250,000 – $38,000)

212,000

Issued common stock for building

Oct. 6

Cash ($110 per share × 800 shares)

Preferred Stock ($100 per share × 800 shares)

Paid-In Capital in Excess of Par—Preferred ($88,000 − $80,000)

Issued preferred stock for cash

Oct. 9

Cash

Common Stock

Paid-In Capital in Excess of Par—Common

Issued common stock for cash

Oct. 10

Retained Earnings

Dividends Payable—Preferred

Dividends Payable—Common

Declared cash dividend.*

Oct. 25

Dividends Payable—Preferred

Dividends Payable—Common

Cash

Paid cash dividend.

*Total Dividend

$ 16,000

Dividend to Preferred Stockholders

5% × $100 × 800 shares

$ 4,000

Current Year Dividend

(4,000)

Dividend to Common Stockholders

$ 12,000