Reference no: EM132537797
Question - Tara Corporation has the following capital structure at the beginning of the year:
5% Preferred stock, $50 par value, 20,000 shares authorized, 6,000 shares issued and outstanding $300,000
Common stock, $10 par value, 60,000 shares authorized, 40,000 shares issued and outstanding 400,000
Paid-in capital in excess of par 110,000
Total paid-in capital 810,000
Retained earnings 440,000
Total stockholders' equity $1,250,000
Required - Prepare journal entries to record the following:
(a) A total cash dividend of $90,000 was declared and payable to stockholders of record. Record dividends payable on common and preferred stock in separate accounts.
(b) A 15% common stock dividend was declared. The average fair value of the common stock is $25 per share.