Preferred stock -- the following information has been provided; Preferred 2% stock $85 par (140,000 shares authorized, 75,000 shares Issued.) Required: Calculate the Preferred Stock dividend per share and the total annual Preferred Stock dividend.
Preferred stock -- the following information has been provided; Preferred 2% stock $85 par (140,000 shares authorized, 75,000 shares Issued.) Required: Calculate the Preferred Stock dividend per share and the total annual Preferred Stock dividend.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:1 Preferred stock -- the following information has been provided;
Preferred 2% stock $85 par (140,000 shares authorized, 75,000 shares
Issued.)
Required: Calculate the Preferred Stock dividend per share and the
total annual Preferred Stock dividend.
2 Explain, in your own words, the impact on the
Balance Sheet when the Board of Directors
declares a cash common stock dividend
3 The Growing Company is expanding and they need some cash to help
with their expansion. The company has decided to issue a bond
with an eight year maturity. The bond was issued on January 1, 2020.
The principal for the bond is $37,500,000 and the bond was issued at a discount.
The bond pays interest semi annually
Required
A.
You must create the following to complete the problem:
Determine the stated interest rate
Determine the market interest rate
В
Calculate the annuity for the bond and the number of periods
Using Excel and showing your work, calculate the Present Value
for the bond.
D.
Prepare the journal entry for January 1, 2020 --- show your work
Prepare the journal entry for the interest/annuity payment
F
Prepare the amortization journal entry for the premium
Explain why interest expense dollar amount is different than cash the dollar
amount if you combine transaction E and F
G
E.
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