Cumulative Preferred Stock

Question 1

This needs to be 2-3 pages of original work. Assignment is below:

You will provide the journal entry to record issuing of common stock shares by a corporation, record issuing of cumulative preferred stock, and record a declaration of stock split.

Company A

During 2013, Company A has the following transactions involving its common and preferred stock:

• Issued 20,000 shares of $8 par common stock for $26 a share; brings total shares outstanding to 50,000 shares
• Issued 6,000 shares of $100 par, 6%, cumulative preferred stock for $150 per share
• When market value of the common stock reached $15 a share, Company A declared a 3-for-1 stock split, reducing the par value to $188 per share

The following is required:

1. Prepare a journal entry for each transaction.
2. Discuss the right of shareholders of capital stock for company A that they are entitled to.
3. Company A is formed as a corporation and therefore, its shareholders have limited liability. Limited liability means that stockholders can only lose the amount of their investment. Discuss how this limited liability affects a corporation.

Question 2

In this module, you learned how family, peers, and cultural influences affect a person’s development. Create a journal entry on how one factor in each category (family, peers, culture) has affected you personally, whether you feel it is positive or negative, and why.