JournaldrillIssuing preferred stock
A journal entry exercise from Journaldrill. Solve it with an account picker and debit and credit fields in your browser, and it is checked the moment you submit.
The task
Coral Bay Resorts Inc. issues 2,000 shares of $50 par value, 6% preferred stock for $54 per share in cash.
What this exercise teaches
Cash is 2,000 x $54 = $108,000 and Preferred Stock is 2,000 x $50 = $100,000. The $8,000 excess goes to paid-in capital in excess of par, preferred; the 6% rate affects future dividends, not this entry.
A hint if you get stuck
Treat it like common stock, but use the preferred accounts for par and the excess.
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