Reference no: EM132460618
Pronghorn Corporation showed the following information on its financial statements on December 31, 2021:
- Preferred Shares, no par value $5 cumulative, 380,000 shares authorized,
- 190,000 shares issued and outstanding$34,200,000 Common Shares, no par value, unlimited shares authorized,
- 450,000 shares issued and outstanding$13,500,000
The following transactions occurred, in the order given, during 2022:
(a) April 15: Received subscriptions and down payments for 115,000 common shares at $38 per share. The subscription contracts call for 55% of the subscription price to be paid upon receipt, and the remaining 45% to be paid on June 30. In the event of default on the subscriptions, the company will retain the down payment.
(b ) May 1: Issued 140,000 preferred shares at $215 per share.
(c) June 30: Received payment for 92,000 of the subscribed common shares; the remaining 23,000 defaulted. Issued the share certificates for the appropriate number of shares.
(d) August 5: Repurchased and cancelled 13,000 common shares at a cost of $22 per share.
(e) September 15: Declared dividends for preferred shares (dividends had not been paid the previous year). Also declared $2.30 per share dividend for common shares. Both dividends are to be paid on November 1 to shareholders of record on October 1.
(f) If the preferred shares had a $180 par value, what would be the journal entry for the May 1 issuance of preferred shares in part (b)?
Question 1: Prepare the journal entries to record the above transactions for Pronghorn Corporation for 2022.