Bogscraft Company has outstanding 67,500 shares of $10 par value common stock an

Question

Bogscraft Company has outstanding 67,500 shares of $10 par value common stock and 26 500 shares of $20 par value preferred stock (8 percent). On February 1, the board of directors voted in favor of an 8 percent cash dividend on the preferred stock. The cash dividends were paid on March 15. The company closed its books at its fiscal year-end, June 30 Required: Prepare journal entries to record the events on (a) February 1, (b) March 15, and (c) June 30. (If no entry is required for a transaction/event, select "No Journal Entry Required in the first account field.) View transaction list Journal entry worksheet Record the declaration of a cash dividend of 8 percent to the 26,500 shares of $20 par value preferred stock outstanding. Note: Enter debits before credits. Date General Journal Debit Credit February 01 Record entry Clear entry View general journal

Explanation / Answer

Date General Journal Debit Credit (a) February 01 Preferred dividend ($26500 x $20 x 8%) 42400 Preferred dividend payable 42400 (To record declaration of cash dividends) (b) March 15 Preferred dividend payable 42400 Cash 42400 (To record payment of cash dividends) (c) June 30 Retained earnings 42400 Preferred dividend 42400 (To close preferred dividend to retained earnings)

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