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31 December, 07:36

Equinox Outdoor Wear issues 1,000 shares of its $0.01 par value preferred stock for cash at $30 per share. Record the issuance of the preferred shares. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

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  1. 31 December, 08:03
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    The journal entry for the issuance of the preferred stock is shown below:

    Explanation:

    Cash A/c ... Dr $30,000

    Preference Stock A/c ... Cr $10

    Paid in Capital in excess of Par A/c ... Cr $29,990

    Working Note:

    Cash = Shares * Issued price per share

    where

    Shares are 1,000

    Issued Price per share is $30

    = 1,000 * $30

    = $30,000

    Preference Stock = Shares * Par price

    = 1,000 * $0.01

    =$ 10

    Paid in Capital in excess of Par = Cash - Preference stock

    = $30,000 - $10

    = $29,990
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