Denison Corporation is authorized to issue 10,000, no par value $10 convertible preferred shares and 125,000 par value common shares with a stated value of $10 per share. During 2022 the following transactions occurred: Feb. 6 Issued 1,000 preferred shares for a building having a fair market value of $125,000. The market value of the shares on this date was $120 per share. July 15 Holders of 2.000 preferred shares purchased at $110 per share converted the shares into common shares. Each preferred share was convertible into 8 common shares. Market values were preferred shares, $122, and common shares, $17. Sept. 22 Issued 4,500 common shares for land. The asking price of the land was 60,000. The market value of the common shares was $18. Oct. 30 Issued 10,000 common shares for cash at $19 per share. Dec. 1 Issued 6,000 common shares for a patent. The asking price for the patent was 60,000. The market value of the common shares was $20 per share.

Denison Corporation is authorized to issue 10,000, no par value $10 convertible preferred shares and 125,000 par value common shares with a stated value of $10 per share. During 2022 the following transactions occurred: Feb. 6 Issued 1,000 preferred shares for a building having a fair market value of $125,000. The market value of the shares on this date was $120 per share. July 15 Holders of 2.000 preferred shares purchased at $110 per share converted the shares into common shares. Each preferred share was convertible into 8 common shares. Market values were preferred shares, $122, and common shares, $17. Sept. 22 Issued 4,500 common shares for land. The asking price of the land was 60,000. The market value of the common shares was $18. Oct. 30 Issued 10,000 common shares for cash at $19 per share. Dec. 1 Issued 6,000 common shares for a patent. The asking price for the patent was 60,000. The market value of the common shares was $20 per share.

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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Queenstown Corporation issues 4,000, $4 cumulative preferred shares at $80 each and 12,000 common shares at $18 at the beginning of 2022. Each preferred share is convertible into four common shares. During the years 2022 and 2023, the following transactions affected Queenstown Corporation's shareholders' equity accounts: 2022 Dec. 10 Declared and paid $12,000 of annual dividends to preferred shareholders. 2023 Dec. 10 Dec. 21 Required: a) b) Declared and paid the annual dividend to preferred shareholders and a $4,000 dividend to common shareholders. The preferred shares were converted into common shares. Journalize each of the 2022 and 2023 transactions. After the preferred shares are converted, what is the total number of common shares issued?
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