Reference no: EM131783413

Question - Dividends and Stockholders' Equity Section

Situation: Elizabeth Company reported the following amounts in the stockholders' equity section of its December 31, 2010, balance sheet.

Preferred stock, 8%, $100 par (10,000 shares authorized, 2,000 shares issued)     $200,000

Common stock, $5 par (100,000 shares authorized, 20,000 shares issued)             $100,000

Additional paid-in capital                                                                                    $125,000

Retained earnings                                                                                             $450,000

Total                                                                                                                $875,000

During 2011, Elizabeth took part in the following transactions concerning stockholders' equity.

1. Paid the annual 2010 $8 per share dividend on preferred stock and a $2 per share dividend common stock.  These dividends had been declared on December 31, 2010.

2. Purchased 2,700 shares of its own outstanding common stock for $40 per share.  Elizabeth uses the cost method.

3. Reissued 700 treasury for land valued at $30,000.

4. Issued 500 shares of preferred stock at $105 per share.

5. Declared a 10% stock dividend on the outstanding common stock when the stock is selling for $45 per share.

6. Issued the stock dividend.

7. Declared the annual 2011 $8 per share dividend on preferred stock and the $2 per share dividend on common stock.  These dividends are payable in 2012.

Instruction: Prepare journal entries to record the transactions describe above.  Please show work.