Markus Industries is authorized by its corporate charter to issue 10,000 shares of preferred stock with a 7% dividend rate and a par value of $10 per share, and 25,000 shares of common stock with a par value of $2 per share. On January 15, 2011, Markus Industries issued 400 shares of its preferred stock for $14 per share and 5,000 shares of common stock for $2.50 per share.© BrainMass Inc. brainmass.com October 10, 2019, 5:47 am ad1c9bdddf
Journal entries in the books of Markus Industries
Jan-15 Cash $12,500
Common stock $10,000
Paid in capital in excess of par - common stock $2,500
This solution shows how to calculate the amount of cash earned by Markus Industries during a stock issuance and shows how their journal entries were recorded, given the number of shares available, the dividend rate and the par value and selling price for both preferred and common stock.