Discuss cash dividend on the common stock

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On April 21, 2014, Southwest Airlines received a charter granting the right to issue 100,000 shares of $100 par value, 6% cumulative and nonparticipating preferred stock, and 1,000,000 shares of $1 par value common stock. The following transactions happened during 2014:

Apr. 28 Issued 100,000 shares of common stock at $23 per share.

Jul. 16 Issued 6,000 shares of preferred stock to Air Canada for the following assets:

Equipment with a fair value of $76,000; a warehouse with a fair value of $240,000; and land with an appraised value of $320,000.

Aug 6 Purchased 750 shares of common stock at $26 per share. (Use cost method.)

Sep. 17 Sold the 750 treasury shares at $27 per share.

Dec. 31 Declared a $0.10 per share cash dividend on the common stock and declared the preferred dividend.

Record the journal entries for the transactions listed above.

Reference no: EM131789745

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