Prepare the journal entry for each transaction listed above. In your own words, explain the main differences between common and preferred stock.

Prepare the journal entry for each transaction listed above. In your own words, explain the main differences between common and preferred stock.

ABC Inc. was incorporated on 1/15/12.
Their corporate charter authorized the following capital stock:

Preferred Stock: 7%, par value $100 per share, 100,000
shares.

Common Stock: $1 par value, 500,000 shares.

The following transactions occurred during the year:

1/19/12 – Issued 100,000 shares of common stock for $17 cash
per share.

1/31/12 – Issued 3,000 shares of preferred stock for $115
cash per share.

11/1/12 – Repurchased 30,000 shares of common stock for $22
cash per share.

12/1/12 – Declared and paid a total dividend of $95,000.

Required:

1. Prepare the journal entry for each transaction listed
above.

2. In your own words, explain the main differences between
common and preferred stock.


Price: £ 45

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