Bonnie Enterprises Inc. received its approved articles of incorporation granting the right to issue an unlimited number of common shares with no par value and 10,000 shares of $4 (Fixed Dividend), cumulative preferred shares. Prepare general journal entries to record the transactions presented below.Jan1Issued 50,000 common shares at $1 per share. 2Issued 1,000 preferred shares at $2 per shareMar30Exchanged 100,000 common shares for machinery with a fair value of $200,000. At the time of the acquisition, the shares were being traded for $2 per share.Dec.31the company did not declare dividend payment for preferred and common shareholders2020 Jan.12Issued 10,000 common shares at $3 per share.Dec.15The board of directors declared a $20,000 dividend payment to preferred shares and common shares, Dec22proceed the shareholders of record Dec31Paid the previously declared dividends.

1) Cumulative preference shares have the rights to claim dividend even if it is not paid, hence due…

Answered: Bonnie Enterprises Inc. received its…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Bonnie Enterprises Inc. received its approved articles of incorporation granting the right to issue an unlimited number of common shares with no par value and 10,000 shares of $4 (Fixed Dividend), cumulative preferred shares.

Prepare general journal entries to record the transactions presented below.

Jan	1	Issued 50,000 common shares at $1 per share.
	2	Issued 1,000 preferred shares at $2 per share
Mar	30	Exchanged 100,000 common shares for machinery with a fair value of $200,000. At the time of the acquisition, the shares were being traded for $2 per share.
Dec.	31	the company did not declare dividend payment for preferred and common shareholders
2020
Jan.	12	Issued 10,000 common shares at $3 per share.
Dec.	15	The board of directors declared a $20,000 dividend payment to preferred shares and common shares,
Dec	22	proceed the shareholders of record

Dec	31	Paid the previously declared dividends.

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