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.
How much total cash did Markus Industries raise through the January 15th 2011 stock issuance?
How are these journal entries recorded?
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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
(To record issue of 5000 common stock of $2 par value at R$2.50 each)
Jan-15 Cash $5,600
Preferred stock $4,000
Paid in capital in excess of par- preferred stock $1,600
(To record issue of 400 Prefered stock of $10 par value at $14 each)
Total Cash received from issuance of stock
(5000 X $2) $10,000
400 X $10 $4,000
Paid in capital in excess of par- common stock $2,500
Paid in capital in excess of par-Preferred stock $1,600
Total Cash received from issuance of stock- preferred stock $18,100