Ravonette Corporation issued 300 shares of $10 par value ordinary shares and 100 shares of $50 par value preference shares for a lump sum of $13,500. The ordinary shares have a market price of $20 per share, and the preference shares have a market price of $90 per share.
Prepare the journal entry to record the issuance.
Share capital – Preference amount is $5,000.
Share capital – Ordinary amount is $3,000.
Preferred shares, commonly known as preferred stock, are shares that empower the shareholders to receive the profits declared by the company before the shareholders accept the value. If the company has chosen to pay its profits to the investors, the preference shareholders are the primary ones to receive payment from the company.
Calculation of Share Capital –Preference Amount
Calculation of Share Capital Ordinary amount
(Analysis of Equity Data and Equity Section Preparation) For a recent 2-year period, the balance sheet of Santana Dotson Company showed the following stockholders’ equity data on December 31 (in millions).
Additional paid-in capital
Total stockholders’ equity
Common stock shares issued
Common stock shares authorized
Treasury stock shares
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