A corporation is authorized by its corporate charter to issue 50,000 shares of preferred stock with a 7% dividend rate and a par value of $10 per share, and 750,000 shares of common stock with a par value of $2 per share. On January 15 of the current year, 2,000 shares of preferred stock was issued for $14 per share along with 10,000 shares of common stock for $2.50 per share.
A)Record the stock issues described above.  B)How much total cash was raised through stock issuances?

What will be an ideal response?

A)Cash (2,000 x $14)28,000   Preferred Stock (2,000 x $10) 20,000  Paid-in Capital in Excess of Par--Preferred Stock8,000      Cash (10,000 x $2.50)25,000   Common Stock (10,000 x $2) 20,000  Paid-in Capital in Excess of Par--Common Stock5,000    B) $28,000 from preferred stock + $25,000 from common  = $53,000     

Business

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